Case study 2: Celadon Club
Facts
The Celadon Club provides licensed facilities to its members and the general public. It also provides assistance to community and sporting organisations by way of donations.
The club is incorporated in the Australian Capital Territory under the Associations Incorporation Act 1991. Its constitution contains clauses prohibiting it from making any distribution, whether in money, property or otherwise, to its members.
The club's facilities include a bar, restaurant and function room. It also has poker machines (which it owns), Keno and TAB.
The club contracts with an external catering company to undertake the operation of the restaurant. Under the contract, the club receives lease payments and the caterer is responsible for all catering, including kitchen and waiting staff.
The club hires out its function room to the public. It also uses the function room for its own events such as Valentine's Day and Melbourne Cup luncheons.
The club has 5,000 members. A register is kept at the door which records member and non-member attendance. During the income year ended 30 June, 50,000 visitors entered the premises, including 43,000 guests who were signed in by members. The club traded for a total of 360 days during the year, and on average 250 members attended the club every trading day.
The club is registered for GST. Its revenue and expenses are shown net of GST, except where the amount of GST incurred is not recoverable from the ATO.
The club's financial statements for the year ended 30 June show the following revenue and expenses:
Revenue
|
$
|
Bar sales
|
827,695
|
Bingo and raffle income
|
23,496
|
Club luncheons – ticket sales
|
22,500
|
Function room hire
|
6,000
|
Interest received
|
54,322
|
Keno commissions
|
46,152
|
Lease income – restaurant
|
10,000
|
Member subscriptions
|
51,800
|
Poker machine revenue – gross net of payouts
|
1,598,247
|
TAB commissions
|
18,421
|
Vending machine commissions
|
21,467
|
Total
|
$2,680,100
|
Expenses
|
$
|
Accounting – general
|
7,000
|
Accounting – management of tax affairs
|
3,000
|
Audit
|
5,000
|
Advertising
|
18,461
|
Bank charges
|
1,927
|
Bar expenses:
|
|
|
|
392,576
|
- Decline in value (depreciating assets)
|
13,592
|
|
|
29,764
|
Bingo expenses
|
4,533
|
Cleaning
|
45,000
|
Club luncheons – catering expenses
|
13,500
|
Club luncheons – entertainer expenses
|
3,000
|
Computer expenses
|
9,664
|
Decline in value (depreciating assets)
|
121,498
|
Directors expenses and honoraria
|
19,712
|
Donations to deductible gift recipients
|
12,869
|
Electricity
|
82,478
|
Insurance
|
48,192
|
Gaming machine expenses:
|
|
|
|
210,969
|
- Payments to community organisations
|
13,786
|
|
|
36,438
|
- Decline in value (depreciating assets)
|
262,481
|
- Central monitoring service charges
|
26,183
|
Keno expenses
|
2,157
|
Members magazine
|
8,000
|
Membership cards
|
2,000
|
Payroll tax
|
9,586
|
Printing, stationery and postage
|
22,544
|
Raffle expenses
|
24,851
|
Rates and land taxes
|
19,688
|
Repairs and maintenance
|
86,563
|
Salaries and wages
|
728,547
|
Pay TV
|
21,665
|
Subscription expenses
|
9,226
|
Superannuation
|
66,499
|
TAB expenses
|
3,661
|
Telephone
|
15,297
|
Total
|
$2,401,907
|
Net profit
|
$278,193
|