3. A hotel operation has 100 rooms and a 100-seat restaurant. Please prepare a pro forma income statement for each of the department as well as the consolidated pro forma income statement of the hotel the next year. Rooms department: In 2019, the occupancy rate was 70% and the average room rate was $50. The GM is forecasting the occupancy rate to increase by 10% and the average room rate is to be increased by $10 in 2020. Cost of sales per room occupied is forecasted to be $10 per room. Department fixed operating expenses is estimated to be $350,000. The hotel opens 365 days a year. Restaurant department: In 2019, average check was $20, with an average seat turnover of 2.50. The GM is forecasting the average check to increase by $5 and seat turnover to decrease by 0.50. Costs of food and beverage and other variable operating expenses are expected to be 30% and 20% of revenue respectively. The fixed operating expenses is estimated to be $250,000 per year. The restaurant opens 300 days a year. Company-wide undistributed expenses & fixed charges: The indirect operating expenses and fixed charges were $300,000 and $400,000, respectively in 2019. GM expect the indirect costs to increase by 2.5% and no changes for fixed charges in 2020. The tax rate is expected to be 20%.
3. A hotel operation has 100 rooms and a 100-seat restaurant. Please prepare a pro forma income statement for each of the department as well as the consolidated pro forma income statement of the hotel the next year. Rooms department: In 2019, the occupancy rate was 70% and the average room rate was $50. The GM is forecasting the occupancy rate to increase by 10% and the average room rate is to be increased by $10 in 2020. Cost of sales per room occupied is forecasted to be $10 per room. Department fixed operating expenses is estimated to be $350,000. The hotel opens 365 days a year. Restaurant department: In 2019, average check was $20, with an average seat turnover of 2.50. The GM is forecasting the average check to increase by $5 and seat turnover to decrease by 0.50. Costs of food and beverage and other variable operating expenses are expected to be 30% and 20% of revenue respectively. The fixed operating expenses is estimated to be $250,000 per year. The restaurant opens 300 days a year. Company-wide undistributed expenses & fixed charges: The indirect operating expenses and fixed charges were $300,000 and $400,000, respectively in 2019. GM expect the indirect costs to increase by 2.5% and no changes for fixed charges in 2020. The tax rate is expected to be 20%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Hello! I need help on how to do this. Thank you!
Transcribed Image Text:3. A hotel operation has 100 rooms and a 100-seat restaurant. Please prepare a pro forma
income statement for each of the department as well as the consolidated pro forma income
statement of the hotel the next year.
Rooms department:
In 2019, the occupancy rate was 70% and the average room rate was $50. The GM is forecasting the
occupancy rate to increase by 10% and the average room rate is to be increased by $10 in 2020. Cost of
sales per room occupied is forecasted to be $10 per room. Department fixed operating expenses is
estimated to be $350,000. The hotel opens 365 days a year.
Restaurant department:
In 2019, average check was $20, with an average seat turnover of 2.50. The GM is forecasting the
average check to increase by $5 and seat turnover to decrease by 0.50. Costs of food and beverage and
other variable operating expenses are expected to be 30% and 20% of revenue respectively. The fixed
operating expenses is estimated to be $250,000 per year. The restaurant opens 300 days a year.
Company-wide undistributed expenses & fixed charges:
The indirect operating expenses and fixed charges were $300,000 and $400,000, respectively in 2019.
GM expect the indirect costs to increase by 2.5% and no changes for fixed charges in 2020. The tax
rate is expected to be 20%.
Transcribed Image Text:c. Prepare the consolidated pro-forma income statement of the hotel operation (combining
rooms and restaurant).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education