4.7 You have agreed to take over the role of bookkeeper for the AB Sports and Social Club.

The summarized balance sheet on 31.12.94 as prepared by the previous bookkeeper, contained the following items.

Assets £ £

Heating oil for clubhouse 1,000 Bar and café stocks 7,000 New sportswear for sale, at cost 3,000 Used sportswear, for hire, at valuation 750 Equipment for groundsperson: cost 5,000 depreciation 3,500 1,500 Subscriptions due 200 Bank: current account 1,000 deposit account 10,000 Claims Accumulated fund 23,150 Creditors: bar and café stocks 1,000 sportswear 300 The bank account summary for the year to 31.12.95 contained the followed items.

Receipts £

Subscriptions 11,000 Bankings: bar and café 20,000 sales of sportswear 5,000 hire of sportswear 3,000 Interest on deposit account 800 Payments Rent and repairs of clubhouse 6,000 Heating oil 4,000 Sportswear 4,500 Groundsperson 10,000 Bar and café purchases 9,000 Transfer to deposit account 6,000 You discover that the subscriptions due figure as at 31.12.94 was arrived at as follows:
£
Subscriptions unpaid for 1993 10 Subscriptions unpaid for 1994 230 Subscriptions paid for 1995 40 Corresponding figures at 31.12.95 are as follows:
£
Subscriptions unpaid for 1993 10 Subscriptions unpaid for 1994 20 Subscriptions unpaid for 1995 90 Subscriptions paid for 1996 200 Subscriptions due for more than 12 months should be written off with effect from 1.1.95.
Asset balances at 31.12.95 include the following:
£
Heating oil for club house 700 Bar and café stocks 5,000 New sportswear, for sale, at cost 4,000 Used sportswear, for hire, at valuation 1,000 Closing creditors at 31.12.95 are as follows:
£
For bar and café stocks 800 For sportswear 450 For heating oil for clubhouse 200 Two-thirds of the sportswear purchases made in 1995 had been added to stock of new sportswear in the figures given in the list of assets above, and one-third had been added directly to the stock of used sportswear for hire.
Half of the resulting ‘new sportswear for sale at cost’ at 31.12.95 is actually over two years old. You decide, with effect from 31.12.95, to transfer these older items into the stock of used sportswear, at a valuation of 25% of their original cost.
No cash balances are held at 31.12.94 or 31.12.95. The equipment for the groundsperson is to be depreciated at 10% per annum, on cost.
Prepare an income and expenditure account and balance sheet for the AB Sports and Social Club for 1995, in a form suitable for circulation to members. The information given should be as complete and informative as possible within the limits of the information given to you.
All workings must be submitted.