1. **Problem Statement:** We are given financial records for Muungano Rugby Club for the year ended 31st Dec 2024. We need to prepare: a) Snack bar profit or loss account b) Income and expenditure account for the year ending 31st Dec 2024. 2. **Snack Bar Profit or Loss Account:** Formula: \[ \text{Profit or Loss} = \text{Income} - \text{Expenses} \] - Income from snack bar = 720000 - Snack bar purchases = 450000 - Snack bar expenses = 72000 - Opening inventory = 96000 - Closing inventory = 108000 3. **Calculate Cost of Goods Sold (COGS):** \[ \text{COGS} = \text{Opening Inventory} + \text{Purchases} - \text{Closing Inventory} \] \[ = 96000 + 450000 - 108000 = 438000 \] 4. **Calculate Snack Bar Profit:** \[ \text{Profit} = \text{Income} - (\text{COGS} + \text{Expenses}) \] \[ = 720000 - (438000 + 72000) = 720000 - 510000 = 210000 \] 5. **Income and Expenditure Account:** We include all incomes and expenses except capital items. **Incomes:** - Subscriptions = 420000 - Snack bar income = 720000 - Visitors fees = 78000 - Loan from bank (not income, it's a liability, exclude) - Competition fees = 98400 **Expenses:** - Rent and Rates = 180000 - Extension to club house (capital expenditure, exclude) - Snack bar purchases and expenses are accounted in snack bar profit - Secretarial expenses = 28800 - Interest on loan = 31200 - Games equipment depreciation = 25% of 240000 = 60000 6. **Calculate Total Income:** \[ 420000 + 720000 + 78000 + 98400 = 1310400 \] 7. **Calculate Total Expenses:** \[ 180000 + 28800 + 31200 + 60000 + (Snack bar loss/profit accounted separately) \] Since snack bar profit is 210000, it will be added to income. \[ \text{Total Expenses} = 180000 + 28800 + 31200 + 60000 = 300000 \] 8. **Calculate Net Surplus (Profit):** \[ \text{Net Surplus} = (\text{Total Income} + \text{Snack Bar Profit}) - \text{Total Expenses} \] \[ = (1310400 + 210000) - 300000 = 1520400 - 300000 = 1220400 \] **Final answers:** - Snack bar profit = 210000 - Net surplus for the year = 1220400