Question Three

Sam's Lodge operates three sections, accommodation, restaurant and bar.

The Assistant Accountant has been tasked to prepare accounts for the year ended 30 September, 2019. The following information was provided:

	Accommodation	Restaurant	Bar
	K	K	K
Sales	90,500	82,700	40,600
Opening inventory	13,300	6,500	4,100
Purchases	45,310	32,550	9,100
Wages of sales assistants	10,100	6,950	4,610
Closing inventory	9,700	7,700	5,100
Fixtures and fittings - cost	33,000	25,000	12,500
No. of employees	7	5	3

The following expenses cannot be traced to any particular section:

General office expenses Rates

Advertising

Salary of Supervisor Telephone

Vehicle running costs Insurance

Cleaning

Repairs and maintenance Electricity

K 3,550 2,250 7,100

17,700 3,300 4,400 4,460 3,150 6,200 6,250

The proportion of the total floor area occupied by each section was:

Accommodation Restaurant

Bar

3/6 2/6 116

Expenses are to be apportioned on the following bases:

Floor area - rates, cleaning, depreciation of building, water & electricity, repairs and maintenance

Sales value - salary of supervisor, advertising

No. of employees - telephone, general office expenses

..

Cost of sales - insurance, motor vehicle depreciation and running costs

The cost of Buildings is K189,500 and Van is K56,000. The van is used mainly to purchase goods for the Lodge. Depreciation is as follows:

Page 3 of 5

Buildings 5 on cost

Fixtures and fittings 10 straight line Motor vehicle 20 straight line

Electricity bill outstanding at the year-end was K2,300 and rates paid for six months up to 31 December 2019 were Kl,350.

Required:

Prepare Sam's Departmental Statement of profit and loss for the year ended 30 September, 2019, showing clearly, the contribution of each department.

(Total: 20 Marks)