4.6 The Ridlingham Recreation Club consists of a tennis section and a rugby section. The following information
Question:
4.6 The Ridlingham Recreation Club consists of a tennis section and a rugby section. The following information has been obtained relating to the position of the club on 1 January 20X1:
£
Clubhouse at cost 38,000 Creditors for bar purchases 3,720 Creditors for general expenses 500 Tennis courts at cost (£40,000) less depreciation to date 24,000 Furniture and equipment at book value 5,000 Bar stocks 4,400 Bank balance 1,500 The club’s bank statements for 20Xl have been analysed and the following summary prepared:
Bank Account 20X1 Receipts £ Payments £
Balance 1 January 1,500 New tennis court 16,000 Ten-year membership 12,000 Repairs to tennis court 2,520 Other subscriptions: Prizes for tennis tournaments 140 Tennis 6,400 Rugby kit 900 Rugby 1,300 Rental of rugby pitch 400 Tennis tournament Rates on clubhouse 1,100 entry fees 240 Payments for bar supplies 48,400 Bar sales 69,660 Wages of bar steward 7,800 Collections at General expenses 17,300 rugby matches 180 Tennis court fees 5,700 96,980 94,560 You discover that all cash received is paid into the club bank account and all payments are made by cheque.
During the year a new tennis court was built that was first used on 1 July 20X1. In order to help pay for the new court, ten-year memberships were offered for sale, at the beginning of the first year, at £400 each.
At 31 December 20X1 creditors for bar purchases and general expenses amount to £4,300 and £640, respectively. Bar stocks are valued at £5,280. It is the club’s policy to write off the cost of the tennis courts over a ten-year period. Furniture is depreciated at 10 per cent per year. For the purpose of the accounts the rugby kit is considered to possess a nil value.
(a) The bar trading account and a general income and expenditure account for 20X1. The general income and expenditure account should show the net surplus or deficit arising separately from the tennis section and the rugby section.
(b) The balance sheet at 31 December 20X1.
Step by Step Answer:
Introduction To Accounting
ISBN: 9780761970378
3rd Edition
Authors: Pru Marriott, J R Edwards, Howard J Mellett