Leaving Cert Accounting Club Accounts: Included in the assets and liabi

Question

Included in the assets and liabilities of Abbey Hockey Club on 01/01/2021 were the following:

Clubhouse and Astroturf at cost €950,000, bar stock €1,820, equipment at cost €42,000, bar debtors €560, life membership €48,000, bar creditors €700, wages due €440, levy reserve fund €50,000, subscriptions received in advance €1,000, investment interest receivable due €420.

All fixed assets already have 3 year's depreciation accumulated at 01/01/2021.

The club treasurer has supplied the following account of the club's activities during the year ended 31/12/2021.

Receipts and Payments account for the year ended 31/12/2021.

Receipts                             €  
Balance 01/01/2021   9,800  
Subscriptions                   425,500  
10 months interest on 5% investments, up to 30/06/2021   1,050  
Competition fees                   22,400  
Catering receipts                 122,500  
Sale of Equipment (cost €30,000)   7,000  
National Lottery grant                120,000  
Hockey Ireland grant               13,500  
Bar receipts                          73,600

Total Receipts                     795,350

Payments                          €  
Catering purchases              93,100  
Bank loan and 9 months' interest at 8% per annum on 30/06/2021   273,480  
Insurance                                15,000  
Payroll expenses                       64,360  
Catering prizes                       18,800

Total Payments                     795,350

You are given the following additional information and instructions:

(i)     Bar stock (including catering stock €11,460) on 31/12/2021 was €21,700.
(ii)    Bar debtors and bar creditors on 31/12/2021 were €780 and €1,100 respectively.
(iii)   Provide for depreciation on equipment at 12.5% of cost. All year's depreciation is charged in the year of acquisition and none in the year of disposal.
(iv)    Clubhouse and Astroturf pitch are to be depreciated by 2% of cost.
(v)     The club has decided that life membership is to be credited to income over a 10-year period which commenced in 2019.
(vi)    The grant from the National Lottery was received on a once-off basis. It is to be treated as a capital item. The grant from Hockey Ireland is received on an annual basis to support the day-to-day activities of the club. It is to be treated as a revenue item.
(vii)   The wages due on 01/01/2021 were owed to the club coach for two weeks. Provide for three week's wages due on 31/12/2021 and include a bonus of €30 for each of the three weeks.
(viii)  Subscriptions include:

1.    Subscriptions for 2022 amounting to €3,160.  
2.    Levy for 2021 of €100 each on all 650 members.  
3.    Levy for 2020 of €100 each due from 30 members.

Required:
(a) Show the club's accumulated fund (capital) on 01/01/2021.
(b) Show the income and expenditure account for the year ending 31/12/2021.
(c) Show the club's balance sheet as at 31/12/2021.
(d) Explain with the use of an example what is meant by a Special Purpose Profit & Loss Account.
(e) There is a proposal to reduce annual subscriptions by 10% for the next three years. As Treasurer of Abbey Hockey Club, what points would you make in favour of this proposal?

Show the club's accumulated fund (capital) on 01/01/2021.

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