CHAPTER 5 Practice Questions


Question 1 Included among the assets and liabilities of Howth Tennis Club on 01/01/2012 were the following: clubhouse and courts €550,000, equipment (cost) €15,000, bar stock 5,000, bar debtors €1,500, bar creditors €2,000, life membership €22,000, levy reserve fund €50,000, 8% government investments €25,000, investment income due €1,000.


You are given the following additional information about the club’s activities during the year ended 31/12/2012:


Receipts Balance


€ 12,000 Payments Bar Purchases


6 months Investment Income 1,000 Sundry Expenses Entrance Fees Sponsorship


2,000 Equipment


Subscriptions Bar Receipts


Balance


90,000 45,000


172,000 68,512


22,000 Repayment of loan on 31/03/2012 together with 1 year’s interest at 4%


Balance €


23,000 17,000 4,000


59,488 68,512


172,000


Additional information given by the treasurer of Howth Tennis Club on 31/12/2012 was as follows: 1 Bar stock on 31/12/2012 of €1,500. 2 Bar debtors and creditors on 31/12/2012 were €350 and €150 respectively. 3 Equipment owned on 31/12/2012 had a Net Book Value of €15,960. 4 Clubhouse and courts owned on 31/12/2012 are to be depreciated at the rate of 3% of cost.


5 Subscriptions include: (i) Two life memberships of €5,000 each. (ii) Levy of €250 on 200 members for 2012. (iii) Levy of €300 each was still outstanding on two members since 2011. (iv) Subscriptions paid in advance by members for 2013 amounted to €17,000.


6 Life membership was to be written off over an 8-year period commencing in 2012. 7 Rent of €1,500 was due on 31/12/2012.


You are required to: (a) Show the club’s Accumulated Fund (capital) on 01/01/2012. (b) Show the Income and Expenditure Account for the year ended 31/12/2012.


Loan = 100% 59,488 = 104%


5


57


TIP


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