Club Accounts (Section 1: 60 marks)

Club Accounts can appear as a 100-mark or a 60-mark question. The only difference is that a 60-mark question will not require a Balance Sheet to be prepared. Included among the assets and liabilities of the Hill Basketball Club on 1/1/2017 were the following: Clubhouse and Court €560,000, Bar Stock €17,000, Equipment (at cost) €125,000, Life Membership €32,000, Bar Debtors €590, Bar Creditors €1,260, Subscriptions Prepaid €600, 8% Government Investments €18,000, Investment Interest due €220, Levy Reserve Fund €25,000, Wages due €850. The Club Treasurer has supplied the following account of the Club’s activities during the year ended 31/12/2017. You are given the following additional information and instructions:

(i) Bar Stock 31/12/2017 was €18,200.

(ii) Equipment owned 31/12/2017 is to be depreciated at

the rate of 20% of cost.

(iii) Clubhouse and Courts to be depreciated by 2%. (iv)Bar debtors and bar creditors on 31/12/2017 were €1,030 and €2,700 respectively. (v) Subscriptions include:

Two life memberships of €2,000 each. Subscriptions for 2018 amounting for €1,000 Levy for 2017 of €50 each on 200 members Levy for €50 on eight members for 2016

(vi) Life membership was to be written off over an eightyear period commencing in 2017. You are required to:

(a) Show the club’s Accumulated Fund

(Capital) on 1/1/2017 (25)

(b) Show the Income and Expenditure Account for the year ended 31/12/2017 (25) (c) Indicate the financial advice you would give to the club treasurer. (10)