Question

The following is the receipts and payments account of Queen's Club for the year ended 31 December 2016: Receipts: Payments: 88680 8320 Balance b/f 2040 Bar Purchases Wages Rent Entrance fees 840 Subscriptions: 2015 2016 2017 500 3720 6100 2560 1940 Heating and lighting General expenses New Equipment Balance c/f 700 Bar Sales Sales of investments 104540 9000 15000 129720 15500 129720 1. Additional information: 1 January 2016 31 December 2016 Bar inventory Owing for bar purchases Rent due 5440 6120 6300 7160 360 720 Heating and lighting due Subscription due General expenses paid in advance 320 380 500 800 100 140 2. On 31 December 2015 the club held investments which cost $10000. During the year ended 31 December 2016, these were sold for $15000. 3. Equipment was valued at $6000 on 31 December 2015. On 30 June 2016, the club purchased additional equipment at a cost of $ 10400. Depreciation is to be provided for at the rate of 10% per annum. (a) Prepare the trading section of the income statement for the year ended 31 6 marks] December 2016. (b) Prepare the income and expenditure account of the Queen's Club for the year ended 31 December 2016. [10 marks] (c) Prepare the statement of financial position of the Queen's Club at 31 [ marks] December 2016.

Answer 1

1) Cash at Bank 4 2040 Bar Stocks 5440 Investment 10000 6 Equipment 6000 7 Subscription due 500 General expenses paid in advance Less Owing for Bar purchases 100 -6120 10 11 Rent due -360 Heating & Lighting Due Accumulated fund at January 1,2016 12 -320 13 17280 14 15 1) Bar Trading 16 Beginning Inventory Bar Purchases (88680-6120+7160) 17 5440 Sales 104540 89720 Ending Inventory 6300 18 19 Wages 8320 Bar Trading Profit 20 7360 Total 21 110840 Total 110840 22

24 3) Income & Expenditure Account 25 Entrance Fees 840 Rent (3720-360+720) 6900 (6100+800) 4080 Subscription recived during current Year 6 Heating & Lighting (2560-320 +380) 2620 Gain on sale of Investment 27 5000 1900 Bar Trading Profit General expenses (1940+100-140) 7360 8 9 Depreciation on Equipment (6000)*10%+( 10400)*10%*6/12 1120 Surplus 0 10380 Total 20100 Total 20100 1 2 83 84 4) Statement of Financial Position Cash at Bank 5 15500 Accumulated fund 17280 6300 Add Surplus 6 Bar Stocks 10380 7 800 Owing for Bar purchases 140 Rent due Outstanding Subscription 7160 Prepaid General expenses 720 8 16400 Heating & Lighting Due -1120 Owing for Equipment (10400-9000) 9 Equipment (6000 10400) 380 L0 1400 Less Depreciation on Equipment 11 Subscriptio received in advance 700 Total Assets 38020 Total Liabilities 12 38020 13