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Club Accounts Included in the assets and liabilities of Callan Golf Club on 01/01/2018 were the following: Clubhouse €620,000; equipment €32,000; investments €60,000; land €240,000; bar stock €7,100; members' subscriptions prepaid €1,800; bar creditors €3,600; cash in hand €3,200 - Leaving Cert Accounting - Question 7 - 2019
Question 7
Club Accounts Included in the assets and liabilities of Callan Golf Club on 01/01/2018 were the following: Clubhouse €620,000; equipment €32,000; investments €60,0... show full transcript
Worked Solution & Example Answer:Club Accounts Included in the assets and liabilities of Callan Golf Club on 01/01/2018 were the following: Clubhouse €620,000; equipment €32,000; investments €60,000; land €240,000; bar stock €7,100; members' subscriptions prepaid €1,800; bar creditors €3,600; cash in hand €3,200 - Leaving Cert Accounting - Question 7 - 2019
Step 1
Prepare a statement showing the club’s accumulated fund 01/01/2018.
Answer
To prepare the accumulated fund statement, we will list the assets and liabilities as of January 1, 2018:
Assets:
- Clubhouse: €620,000
- Equipment: €32,000
- Investments: €60,000
- Land: €240,000
- Bar stock: €7,100
- Cash in hand: €3,200
- Subscriptions prepaid: €1,800
Total Assets: €620,000 + €32,000 + €60,000 + €240,000 + €7,100 + €3,200 + €1,800 = €964,100
Liabilities:
- Bar creditors: €3,600
Total Liabilities: €3,600
Accumulated Fund on 01/01/2018: Total Assets - Total Liabilities = €964,100 - €3,600 = €960,500
Step 2
Prepare a bar trading account for the year ended 31/12/2018.
Answer
The Bar Trading Account for the year will show sales and purchases to calculate the bar profit.
Bar Trading Account for the Year Ended 31/12/2018:
Sales:
- Bar Sales: €42,100
Less: Cost of Sales
- Opening Stock: €7,100
- Purchases: €26,900
- Closing Stock: €7,200
Cost of Sales Calculation: Cost of Sales = Opening Stock + Purchases - Closing Stock = €7,100 + €26,900 - €7,200 = €26,800
Bar Profit Calculation: Bar Profit = Sales - Cost of Sales = €42,100 - €26,800 = €15,300
Step 3
Prepare the club's income and expenditure account for the year ending 31/12/2018.
Answer
To prepare the Income and Expenditure Account, we will list all sources of income and expenditures:
Income and Expenditure Account for the Year Ending 31/12/2018:
Income:
- Bar profit: €15,300
- Subscriptions: €72,700
- Investment interest: €1,800
- Annual sponsorship: €14,400
Total Income: €15,300 + €72,700 + €1,800 + €14,400 = €104,200
Expenditure:
- General expenses: €23,800
- Insurance: €5,600
- Depreciation on clubhouse: €18,600
- Depreciation on equipment: €8,850
Total Expenditure: €23,800 + €5,600 + €18,600 + €8,850 = €56,850
Excess Income over Expenditure: Total Income - Total Expenditure = €104,200 - €56,850 = €47,350
Step 4
Prepare the club's balance sheet as at 31/12/2018.
Answer
The Balance Sheet summarizes the club's financial position:
Balance Sheet of Callan Golf Club as at 31/12/2018:
Fixed Assets
- Clubhouse: Cost €620,000, Depreciation €18,600, Net Book Value €601,400
- Land: Cost €240,000, Net Book Value €240,000
- Equipment: Cost €35,400, Depreciation €8,850, Net Book Value €26,550
- Investments: Cost €60,000, Net Book Value €60,000
Total Fixed Assets: €928,950
Current Assets
- Bank: €99,500
- Bar stock: €7,200
- Subscriptions due: €2,100
Total Current Assets: €108,800
Total Assets: €928,950 + €108,800 = €1,037,750
Current Liabilities
- Bar creditors: €2,300
- General expenses due: €3,100
Total Current Liabilities: €5,400
Net Worth Calculation: Total Assets - Total Liabilities = €1,037,750 - €5,400 = €1,032,350
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 closing balance in the receipts and payments account reflects the cash at the end of the year, while the income and expenditure account shows the profit or loss for the period. This difference arises because the income and expenditure account includes items that may not represent cash transactions, such as accrued expenses or income that has been earned but not yet received. Therefore, the closing balance can differ due to timing differences in revenues and expenses recognized during the accounting period.