Photo AI
Included in the assets and liabilities of the Round Towers Football Club on 01/01/2010 were the following: Clubhouse/Pitches €375,000; Equipment €19,000; Bar Stock €6,300; Investments €30,000; Bar Creditors €900; Members' subscriptions due €800; Cash in hand €25,400 - Leaving Cert Accounting - Question 6 - 2011
Question 6
Included in the assets and liabilities of the Round Towers Football Club on 01/01/2010 were the following: Clubhouse/Pitches €375,000; Equipment €19,000; Bar Stock ... show full transcript
Worked Solution & Example Answer:Included in the assets and liabilities of the Round Towers Football Club on 01/01/2010 were the following: Clubhouse/Pitches €375,000; Equipment €19,000; Bar Stock €6,300; Investments €30,000; Bar Creditors €900; Members' subscriptions due €800; Cash in hand €25,400 - Leaving Cert Accounting - Question 6 - 2011
Step 1
Prepare a statement showing the club’s Accumulated Fund on 01/01/2010
Answer
To determine the Accumulated Fund of the club on 01/01/2010, we will compile the total assets and liabilities as outlined:
Assets
- Clubhouse/Pitches: €375,000
- Equipment: €19,000
- Bar Stock: €6,300
- Investments: €30,000
- Subscriptions Due: €800
- Cash in Hand: €25,400
Total Assets Calculation
egin{align*}
ext{Total Assets} &= 375,000 + 19,000 + 6,300 + 30,000 + 800 + 25,400
&= 456,600
ext{Liabilities}:
- Bar Creditors: €900
Total Liabilities Calculation
egin{align*} ext{Total Liabilities} &= 900 ext{Accumulated Fund} = ext{Total Assets} - ext{Total Liabilities} ext{Accumulated Fund} &= 456,600 - 900 = 455,700
a) The club’s Accumulated Fund on 01/01/2010 is €455,700.
Step 2
Prepare a Bar Trading Account for the year ended 31/12/2010
Answer
For the Bar Trading Account:
Bar Trading Account for the year ended 31/12/2010
| Sales | € |
|---|---|
| Bar Sales | 38,500 |
Less Cost of Sales
- Opening Stock: €6,300
- Purchases: €24,200
- Less Closing Stock: €4,800
Calculation
egin{align*}
ext{Cost of Sales} &= 6,300 + 24,200 - 4,800 = 25,700
ext{Bar Profit} &= ext{Sales} - ext{Cost of Sales} = 38,500 - 25,700 = 12,800
Bar Profit
Final Bar Profit: €12,800.
Step 3
Prepare the club’s Income and Expenditure Account for the year ended 31/12/2010
Answer
Income and Expenditure Account for the year ended 31/12/2010
Income
- Bar Profit: €12,800
- Subscriptions: €22,000
- Investment Interest: €150
- Annual Sponsorship: €10,000
- Lotto Receipts: €43,700
- Lotto Prizes: €13,000
Total Income Calculation
egin{align*} ext{Total Income} &= 12,800 + 22,000 + 150 + 10,000 + 43,700 + 13,000 = 101,650
Expenditure
- General Expenses: €14,300
- Expenses due: €900 (as at 31/12/2010)
Total Expenditure Calculation
egin{align*} ext{Total Expenditure} &= 14,300 + 900 = 15,200\
Surplus or Deficit Calculation
egin{align*}
ext{Surplus} &= ext{Total Income} - ext{Total Expenditure}
ext{Surplus} &= 101,650 - 15,200 = 86,450
Conclusion
The club’s Income and Expenditure Account for the year ended 31/12/2010 shows a net surplus of €86,450.
Step 4
Prepare the Balance Sheet on the 31/12/2010
Answer
Balance Sheet of Round Towers Football Club as at 31/12/2010
Fixed Assets
- Clubhouse/Pitches: €375,000 (Less Depreciation: €7,500)
- Equipment: €19,000 (Less Depreciation: €4,300)
Calculation of Net Fixed Assets
egin{align*} ext{Net Fixed Assets} &= (375,000 - 7,500) + (19,000 - 4,300) = 367,200 + 14,700 = 381,900\
Current Assets
- Stock: €4,800
- Cash: €100,900
Total Current Assets Calculation
egin{align*} ext{Total Current Assets} &= 4,800 + 100,900 = 105,700\
Total Assets Calculation
egin{align*} ext{Total Assets} &= 381,900 + 105,700 = 487,600\
Liabilities
- Bar Creditors: €1,300
- Subscriptions Prepaid: €250
- Expenses Due: €900
Total Liabilities Calculation
egin{align*} ext{Total Liabilities} &= 1,300 + 250 + 900 = 2,450\
Capital Calculation
egin{align*} ext{Total Net Assets} &= ext{Total Assets} - ext{Total Liabilities} = 487,600 - 2,450 = 485,150\
Conclusion
Total assets of the Round Towers Football Club as of 31/12/2010 amount to €487,600, with liabilities at €2,450.
Step 5
Explain the difference between the balance in the Income and Expenditure Account and the closing balance in the Receipts and Payments Account
Answer
The balance in the Receipts and Payments Account reflects the available cash during the period covered, presenting a straightforward cash flow status at year-end.
On the other hand, the Income and Expenditure Account records income earned and expenses incurred across the accounting period, accounting for any prepayments or accruals. Thus, it shows the net surplus or deficit based on income generated versus expenditure incurred, irrespective of cash movements.
Therefore, discrepancies arise due to timing differences in recognizing income and expenditure, leading to a balance in the Income and Expenditure Account that may not equate directly to the closing balance in the Receipts and Payments Account.