A) Prepare a Summary Operating Statement according to the format shown in the ch
ID: 2596450 • Letter: A
Question
A) Prepare a Summary Operating Statement according to the format shown in the chapter. Following is the general ledger information for a small hotel. Not all information may be necessary to prepare the statement.
Room sales $ 1,050,000
Food and beverage sales 525,000
Rentals and other income 20,000
Payroll and other expenses:
Rooms 335,000
Cost of food sales 175,000
Payroll and other expenses:
F & B 250,000
Administrative and general 165,000
Marketing 67,000
Property operation and maintenance 62,000 Utilities 45,000
Management fees 20,000
Rent 28,000
Property taxes 45,000
Insurance (property & liability) 7,000
Interest 195,000
Depreciation 140,000
Amortization 6,000
Income tax expense 12,000
Note: The company has estimated its replacement reserve for the period to be $15,000
B) Use the information from problem 9 to prepare an income statement that would be sent to stockholders.
Explanation / Answer
SUMMARY INCOME STATEMENT REVENUE: Room sales 1,050,000.00 Food and beverage sales 525,000.00 Rentals and other income 20,000.00 TOTAL REVENUE 1,595,000.00 EXPENSES Payroll and other expenses: Rooms 335,000.00 Foods & Beverages 250,000.00 Cost of food sales 175,000.00 Administrative and general 165,000.00 Marketing expenses 67,000.00 Property operation and maintenance 62,000.00 Utilities 45,000.00 Management fees 20,000.00 Rent 28,000.00 Property taxes 45,000.00 Insurance (property & liability) 7,000.00 Interest 195,000.00 Depreciation 140,000.00 Amortization 6,000.00 Income tax expense 12,000.00 TOTAL EXPENSES 1,552,000.00 NET OPERATING INCOME 43,000.00 Transferred to Replacement Reservs 15,000.00 NET INCOME 28,000.00
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