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Read the following information and answer the questions that follow: VIJAYA SHANKAR, an Ex-Indian cricketer decided to start a cricket academy to train the young enthusiastic players of down south. With the support and guidance of his family he started the Star cricket academy at Tirunelveli township area on 1st April, 2020.
Land was donated by his grandfather worth ₹ 10,00,000 as per his will for cricket coaching. His father Shankar donated ₹ 5,00,000 for the construction and running of the academy. He spent ₹ 3,00,000 for construction of the pavilion. 200 players of Tirunelveli joined the academy and they paid a yearly subscription of ₹ 1200 each. 10 players paid in advance for the next year 2021-22. Vijaya Shankar appointed a well experienced coach for them, the coach fee amounted to ₹ 1,20,000 p.a. The maintenance expenses amounted to ₹ 75,000. Bats and balls purchased during the year amounted to ₹ 15,000. Closing stock of bats and balls amounts to ₹ 1000.
Q. What is the Primary source of income for the academy?
  • a)
    Subscription
  • b)
    Fund
  • c)
    Donation
  • d)
    All of the above
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Read the following information and answer the questions that follow: ...
Subscription is the amount paid by the members periodically so that their membership remains alive.
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Primary Source of Income for the Academy
The primary source of income for the Star Cricket Academy is derived from the subscription fees paid by the players. Below are the details explaining this:
1. Subscription Fees
- A total of 200 players joined the academy.
- Each player paid a yearly subscription fee of ₹ 1,200.
- Therefore, the total income from subscriptions can be calculated as:
200 players x ₹ 1,200 = ₹ 2,40,000.
2. Additional Income
- Apart from the regular subscriptions, 10 players paid in advance for the next year, contributing an additional:
10 players x ₹ 1,200 = ₹ 12,000.
- This brings the total subscription income to ₹ 2,52,000.
3. Donations and Funds
- The academy did receive donations (land valued at ₹ 10,00,000 and ₹ 5,00,000 from his father), but these funds are not part of the operational income.
- Donations are generally considered as one-time financial support rather than a recurring source of income.
Conclusion
- Given that the academy's operations rely primarily on the income generated from player subscriptions, it is evident that the subscription fees form the backbone of the academy's financial sustainability.
- Donations, while significant, do not contribute to the regular income needed for day-to-day operations.
Thus, the correct answer is option 'A', Subscription, as it is the main and most reliable source of income for the academy.
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Vijaya Shankar appointed a well experienced coach for them, the coach fee amounted to ₹ 1,20,000 p.a. The maintenance expenses amounted to ₹ 75,000. Bats and balls purchased during the year amounted to ₹ 15,000. Closing stock of bats and balls amounts to ₹ 1000.Q. What is the Primary source of income for the academy?a)Subscriptionb)Fundc)Donationd)All of the aboveCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
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