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Mental Block

Basic B/K, but confused.

Didn't find your answer?

I've thought myself into a corner, so need help.

In 2020 a sports club had subs of £20k, but because they were shut for covid, decided to give the members a credit against the 2021 fees.

Subs £20k less reserve £6k, shown as a creditor=£14k on P&L.

This year the subs actually received are £19k (net of reduction taken by some members). What do I do with the reserve of £6k from PYA?

If I bring it into the Subs a/c then subs become £25k , which is obviously wrong, but how do I get rid of it?

Replies (12)

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By Wanderer
07th Oct 2021 18:23

pawncob wrote:

....which is obviously wrong ...

Why have you reached that conclusion?
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By jonharris999
07th Oct 2021 19:04

£25K isn't wrong (unless you mean that the £19K includes the £6K). £25K is correct. The £6K is last year's deferred income (not on P&L last year, creditor on the B/S) and therefore is added to this year's P&L and the B/S creditor cancelled.

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By 356B
07th Oct 2021 19:30

But it's not deferred income. It was given as a reduction in membership fees and will never be received. The actual amount received this year is £19k after some members took advantage of the reduction offered against the 2021 fees. The club did not receive £25k. I've still got a reserve of £6k!

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Replying to 356B:
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By jonharris999
07th Oct 2021 21:23

Are you the OP? Can you start by posting with the same identity, even before you move on to describing the same income in the same way, not different ways, in different posts?

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Replying to jonharris999:
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By 356B
08th Oct 2021 10:10

Sorry. I was looking for a very old post and didn't log out as pawncob.

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Replying to 356B:
RLI
By lionofludesch
08th Oct 2021 07:14

356B wrote:

But it's not deferred income. It was given as a reduction in membership fees and will never be received. The actual amount received this year is £19k after some members took advantage of the reduction offered against the 2021 fees. The club did not receive £25k. I've still got a reserve of £6k!

They received £39k over the two years so what's certain is that subs over the period must be £39k. How you treat it depends on how the concession was worded. Sounds to me like £20k and £19k but it's not entirely clear.

Saying the £6k was never received is nonsense. It was received last year - it just wasn't counted as income in that year.

All with the caveat "if I understand you correctly".

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By paulwakefield1
07th Oct 2021 19:55

If I understand you correctly, they have simply reduced the 2021 fees (and called it a credit) and £20k income should be reflected in 2020 and £19k in 2021.

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By Sandnickel
08th Oct 2021 07:16

If the reduction was against 2021 fees then why did you account for it in 2020? You've reduced the fees in 2020 but not all the credits were taken? So you need to reverse the incorrect provision to reflect the actual amount of subs received.

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By DouglasN
08th Oct 2021 13:46

Another thought - should it still be a creditor? Are the members still entitled to the credit, or was it specifically only against 2021 fees.

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Replying to DouglasN:
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By 356B
08th Oct 2021 15:53

The "credit" was against the subs for y/e 31/08/20, when the club was shut for covid.
The reserve was set against the subs already received because the committee decided to rebate the unusable portion of the subs, and it related to that year.
The creditor was B/Fwd to 2021 year. The 2021 subs received have been reduced by the "credit" from 2020, so lower amounts were paid than were actually due, but the P&L figure for 2021 will include the creditor B/Fwd thereby increasing it to the amount that should have been paid for 2021. Does everyone agree?

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Replying to 356B:
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By I'msorryIhaven'taclue
08th Oct 2021 16:10

Does the committee agree?

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Replying to 356B:
RLI
By lionofludesch
08th Oct 2021 16:38

356B wrote:

Does everyone agree?

I don't think anyone but you doubted it.

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