The preparation of an income and expenditure account for the year ended December 31, 2010, for The Happy Haddock Angling Club is as follows:
The Happy Haddock Angling Club
<h3>Income and Expenditure Account</h3>
For the year ended December 31, 2010
Snack bar income Rm 6,000
Cost of snacks 3,650
Gross profit from bar 2,350
Snack bar expense 600
Snack bar operating income 1,750
Other expenses:
Rent and rates Rm1,500
Secretarial expenses 240
Interest on loan 260 2,000
Net loss Rm 250
<h3>What is an income and expenditure account?</h3>
An income and expenditure account is the income statement prepared by non-trading entities to determine the surplus or deficit of income over expenditures for a period.
<h3>Data and Calculations:</h3>
Cash at bank Rm 200
Snack bar inventory 800
Clubhouse buildings 12,500
Equity = Rm 13,500 (Rm 200 + 800 + 12,500)
<h3>Cash Account:</h3>
Receipts: Payments:
Subscriptions 2010 Rm3,500 Rent and rates Rm1,500
Subscriptions 2011 380 Extension to dub house 8,000
Snack bar income 6,000 Snack bar purchases 3,750
Visitors' fees 650 Secretarial expenses 240
Loan from bank 5,500 Interest on loan 260
Competition fees 820 Snack bar expense 600
Games equipment 2,000
Balance c/d 500
16,850 16,850
Notes:
The snack bar inventory on 31 December 2010 was RM900
The Games equipment should be depreciated by 20%.
<h3>Cost of Snacks Bar Sales:</h3>
Snack bar inventory 800
Snack bar purchases 3,750
Total snack bar available = Rm 4,550
Snack bar ending inventory Rm 900
Cost of snacks sold = Rm3,650
Games Equipment Depreciation = Rm 400 ( Rm 2,000 x 20%)
Rent and rates Rm1,500
Secretarial expenses 240
Interest on loan 260
Snack bar expense 600
Snack bar income 6,000
Subscriptions 2010 Rm3,500
Visitors' fees 650
Competition fees 820
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