5 CLUB ACCOUNTS Sample Question 60 Mark Question


Included among the assets and liabilities of Corofin GAA Club on 01/01/2012 were the following: clubhouse and gym €300,000, equipment (cost) €40,000, bar stock €4,000, bar debtors €1,500, bar creditors €6,000, life membership €30,000, levy reserve fund €30,000, wages due €1,000, subscriptions received in advance €1,200, 5% investment €150,000, investment interest due €500. The club treasurer has supplied the following account of the club’s activities during the year ended 31/12/2012:


Receipts Balance


5% Govt. Investment Interest Entrance Fees Sponsorship Subscriptions Bar Receipts Catering


€ 12,000 Payments Bar Purchases


1,500 General Expenses 4,000 Equipment


14,000 Repayment of €40,000 loan 48,600 on 31/06/2012 together with 45,000 2 years interest


12,000 Transfer to Credit Union 31/12/2012 Catering Expenses Balance


Balance


137,100 5,100


Additional information given by the treasurer on 31/12/2012 was as follows: 1 20% depreciation applied to all equipment owned at cost value on 31/12/2012. 2 The clubhouse bar had stock on 31/12/2012 of €5,000. 3 Bar debtors and creditors on 31/12/2012 were €400 and €600 respectively. 4 Life membership was to be written off over an 8-year period commencing in 2012. 5 Subscriptions include: (i) Levy of €150 on 100 members for 2011. (ii) One life membership, bringing total life memberships up to 16. (iii) Levy of €150 on 200 members for 2012. (iv) Subscriptions paid in advance for 2013 amounted to €1,000.


5


You are required to: (a) Show the club’s Accumulated Fund (capital) on 01/01/2012. [25 Marks] (b) Show the Income and Expenditure Account for the year ended 31/12/2012. [28 Marks] (c) If it were proposed to introduce a further 4-year levy to fund a €120,000 pitch resurface, what points would you, as an ordinary member, now make? [7 Marks]


Clubs are not a commercial business. An example is a GAA Club. Clubs have non-trading concerns. A club’s aim is to satisfy its members. It is not its objective to make a profit. A club’s accounts are very similar to that of any business, but instead of a Profit & Loss Account, you have an Income & Expenditure Account.


Terms used in Club Accounts • The terms Profit or Loss are not mentioned (except in a Special Trading Account). • Excess Income over Expenditure is the termused instead of Profit. • Excess Expenditure over Income is the termused instead of Loss.


Special Purpose Trading Profit and Loss Account Example: Bar Trading Account This is a separate trading account done specifically for the bar. This is out to make a profit.


54 €


30,000 12,000 12,000


50,000 20,000 8,000 5,100


137,100


Notes


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