6 SERVICE ACCOUNTS


Question 8 On 01/01/2012,Whiterock Private Hospital had the following assets and liabilities: premises and grounds at cost €650,000, equipment €350,000, furniture €57,000, ambulance €65,000, stock of shop €2,000, creditors for medical supplies €2,500, stock of heating oil €1,000, authorised share capital €570,000, issued share capital €350,000, 2 months contract cleaning prepaid €2,000, clients’ fees paid in advance €4,200, 5% investments €250,000, creditors for shop supplies €1,250. Fixed assets have three years’accumulated depreciation on 01/01/2012. The following is the Receipts and Payments Account forWhiterock Private Hospital the year ended 31/12/2012:


Receipts Bank


Clients’ Fees


Investment Income Shop Receipts Loan


€


320,000 10,000


Payments 10,320 Wages


Light and Heat Laundry


42,000 Purchases Shop 50,000 Telephone


Extension 01/01/2012 Balance 56,330 New Ambulance 488,650 Balance €


155,000 34,000 42,000 22,000 8,000


155,000


Annual Cleaning 01/03/2012 12,000 Purchases Medical Supplies


5,650 55,000


488,650 56,330


The following information and instructions are to be taken into account: • Closing stock shop €2,000, medical supplies €1,800, heating oil €450. • Clients’ fees in arrears at 31/12/2012 amounts to €2,600. • Depreciation is to be provided as follows: • Premises and grounds 3% of cost per annum. • Equipment 10% of cost per annum. • Ambulance 20% of cost per annum from date of purchase to date of sale. The ambulance owned on 01/01/2012was purchased on 01/01/2009. This ambulancewas traded in on 31/09/2012 against a new ambulance. The trade-in allowancewas €5,000.


• Creditors for shop and medical supplies on 31/12/2012were €1,800 and €2,100 respectively.


• Electricity due and telephone due on 31/12/2012was €1,560 and €750 respectively. • On 31/12/2012,Whiterock Private Hospital decided to revalue its premises and grounds to €900,000.


• 20% ofWages, Light and Heat, and Cleaning are attributable to the hospital shop. 6


You are required to: (a) Calculate the Company Reserves on 01/01/2012. (b) Prepare the Profit and Loss for the shop for the year ended 31/12/2012. (c) Prepare a Profit and Loss Account for the year ended 31/12/2012. (d) Prepare a Balance Sheet as at 31/12/2012.


Create Revaluation Account.


82


TIP


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