• 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:

     

    • Cost of goods sold

     

    392,576

    • Decline in value (depreciating assets)

     

    13,592

    • Maintenance and supplies

     

    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:

     

    • Gaming machine tax

     

    210,969

    • Payments to community organisations

     

    13,786

    • Repairs and maintenance

     

    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

      Last modified: 23 Jun 2016QC 23099