Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

The GT Boating Club is a not-for-profit organisation that raises money through annual subscription payments.
(a)[10]

Prepare a statement for the year ended 31 December 2016 to work out the restaurant profit. The statement should also show the gross profit clearly.

(b(i))[2]

Calculate how far apart the gross margins of both restaurants are.

(b(ii))[6]

Discuss three actions the club could take to raise the gross margin.

(c)[2]

Explain how the life subscriptions should be accounted for.

(d)[5]

Advise Gurmukh whether he ought to become a life member or not. Justify your advice.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Revenue comes to $45 000

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