Leaving Cert Accounting Club Accounts: Included among the assets and li

Question

Included among the assets and liabilities of the Bard's Valley Golf Club on 1/1/2007 were the following:

Clubhouse and Course €700,000, Bar stock €7,000, Equipment (at cost) €26,000, Life membership €40,000, Bar Debtors €533, Bar creditors €6,000, Levy Reserve Fund €1,000 receivable due €400, Wages due €2,500, Subscriptions receivable in advance €1,600.

The club treasurer has supplied the following account of the club’s activities during the year ended 31/12/2007.

Receipts                             €  
Bank Current account        14,000  
Investment Interest from      1,600  
5% Government Investments   2,000  
Entrance Fees                    14,000  
Catering receipts                15,000  
Annual sponsorship               2,500  
Subscriptions                       250,000  
Bar receipts                         110,460

Total Receipts               430,060

Payments                          €  
Bar purchases                 78,500  
Catering costs                  18,000  
Salaries/ Wages                33,000  
Golf Lessons for club teams   2,000  
Loan Interest due              2,600  
Levy to Charity Society        15,000  
Balance                              430,060

You are given the following additional information and instructions:  
1. Bar stock on 31/12/2007 was €8,500.  
2. Equipment cost on 31/12/2007 is to be depreciated at 20% of cost.  
3. Clubhouse and Course on 31/12/2007 were to be depreciated by 2%.  
4. Bank Debtors and Creditors on 31/12/2007 were €2,600 and €1,320 respectively.  
5. Subscriptions:  
    (i) Life membership bringing total Life membership to €1,600.  
    (ii) Levy for 2007 of €2,250 on members for 2006.  
    (iii) Levy for 2007 of €2,500 on 20 members for 2007.  
6. Life membership was to be written off over a 10 year period commencing in 2007.

You are required to:  
(a) Show the Club’s Accumulated Fund (Capital) on 1/1/2007.  
(b) Show the Income and Expenditure Account for the year ending 31/12/2007.  
(c) Explain with regard to the use of an example why it is a Special Purpose Profit & Loss Account.  
(d) If you were required to introduce a further levy to fund a €250,000 extension what would you propose to you act as an ordinary member now.

Show the Club’s Accumulated Fund (Capital) on 1/1/2007

Assets:

Liabilities:

Accumulated Fund Calculation:

Show the Income and Expenditure Account for the year ending 31/12/2007

Income:

Expenditure:

Surplus:

Explain with regard to the use of an example why it is a Special Purpose Profit & Loss Account

Example:

If you were required to introduce a further levy to fund a €250,000 extension what would you propose to you act as an ordinary member now

Calculation:

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