Accounts of a Service Firm The Bergin family are involved in the tourist industry - Leaving Cert Accounting - Question 7 - 2021

To prepare the Income and Expenditure Account, we categorize the entries into income and expenditure:

Income:

• Receipts from guests: €41,250 (after excluding the €3,150 booking deposit for 2021)
• Receipts from bicycle hire: €3,400
• Rent from Airbnb: €25,000

Total Income: $ext{Total Income} = 41,250 + 3,400 + 25,000 = 69,650$

Expenditure:

• Provisions: €2,625
• Light and heat: €4,400
• Wages: €21,400
• Laundry: €2,000
• Advertising: €1,520
• Repairs and maintenance: €2,200
• Depreciation on Bicycles (20% of €8,100): €1,620
• Depreciation on Equipment and Linen (15% of €9,600): €1,440

Total Expenditure: $ext{Total Expenditure} = 2,625 + 4,400 + 21,400 + 2,000 + 1,520 + 2,200 + 1,620 + 1,440 = 36,205$

Excess Income over Expenditure: $ext{Excess Income} = ext{Total Income} - ext{Total Expenditure} = 69,650 - 36,205 = 33,445$

To prepare the balance sheet, we classify assets and liabilities as per accounting principles:

Fixed Assets:

• B & B premises: €540,000
• Equipment and linen (after depreciation): €8,160
• Airbnb premises: €60,000
• Bicycles (after depreciation): €6,480

Total Fixed Assets: $ext{Total Fixed Assets} = 540,000 + 8,160 + 60,000 + 6,480 = 614,640$

Current Assets:

• Stock of fuel and heating: €860
• Bank: €33,310

Total Current Assets: $ext{Total Current Assets} = 860 + 33,310 = 34,170$

Total Assets: $ext{Total Assets} = 614,640 + 34,170 = 648,810$

Liabilities:

• Current Liabilities (Advance deposits): €1,700
• Provisions due: €3,350

Total Liabilities: $ext{Total Liabilities} = 1,700 + 3,350 = 5,050$

Net Worth: $ext{Net Worth} = ext{Total Assets} - ext{Total Liabilities} = 648,810 - 5,050 = 643,760$