Hotel QUIZ has three departments: Rooms, Food and Beverage and Minor Operated Departments. The ending balances of the accounts are presented below for the year 2021. Administrative and General Advances from Customers 150,000 32,000 Advertising and Promotion 65,000 Cost of Sales - F&B Dept. Cost of Sales - Minor Operated Dept. 300,000 40,000 Depreciation Heat, Light, Power 120,000 80,000 30,000 110,000 Insurance Interest Expense Other Expenses - Minor Operated Dept. Other Expenses - Rooms Dept. Other Expenses - F&B Dept. Payroll - F&B Dept. Payroll - Minor Op. Dept. Payroll - Rooms Dept. Prepaid Expenses Repairs and Maintenance Salaries Payable Sales Revenues- F&B Dept. 6,000 90,000 80,000 340,000 35,000 200,000 24,000 130,000 20,000 900,000 800,000 100,000 Sales Revenues - Rooms Dept. Sales Revenues - Minor Op. Dept. Tax 20% a) Construct the departmental income statements for the three departments of Hotel QUIZ. Calculate departmental income percentages. b) Construct the total income statement of the Hotel Quiz, in proper extended (alternative) format. Indicate different profit measures from the income statement and state the management level which is responsible from each profit figure. c) Indicate what would happen to the hotel's net profit if $100,000 revenue shifted from Rooms Department to F&B Department. Calculate the impact on net profit of the hotel.
Hotel QUIZ has three departments: Rooms, Food and Beverage and Minor Operated Departments. The ending balances of the accounts are presented below for the year 2021. Administrative and General Advances from Customers 150,000 32,000 Advertising and Promotion 65,000 Cost of Sales - F&B Dept. Cost of Sales - Minor Operated Dept. 300,000 40,000 Depreciation Heat, Light, Power 120,000 80,000 30,000 110,000 Insurance Interest Expense Other Expenses - Minor Operated Dept. Other Expenses - Rooms Dept. Other Expenses - F&B Dept. Payroll - F&B Dept. Payroll - Minor Op. Dept. Payroll - Rooms Dept. Prepaid Expenses Repairs and Maintenance Salaries Payable Sales Revenues- F&B Dept. 6,000 90,000 80,000 340,000 35,000 200,000 24,000 130,000 20,000 900,000 800,000 100,000 Sales Revenues - Rooms Dept. Sales Revenues - Minor Op. Dept. Tax 20% a) Construct the departmental income statements for the three departments of Hotel QUIZ. Calculate departmental income percentages. b) Construct the total income statement of the Hotel Quiz, in proper extended (alternative) format. Indicate different profit measures from the income statement and state the management level which is responsible from each profit figure. c) Indicate what would happen to the hotel's net profit if $100,000 revenue shifted from Rooms Department to F&B Department. Calculate the impact on net profit of the hotel.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Hotel QUIZ has three departments: Rooms, Food and Beverage and Minor Operated
Departments. The ending balances of the accounts are presented below for the year 2021.
Administrative and General
Advances from Customers
Advertising and Promotion
Cost of Sales - F&B Dept.
Cost of Sales - Minor Operated Dept.
Depreciation
Heat, Light, Power
150,000
32,000
65,000
300,000
40,000
120,000
80,000
Insurance
30,000
Interest Expense
Other Expenses - Minor Operated Dept.
Other Expenses - Rooms Dept.
Other Expenses - F&B Dept.
Payroll - F&B Dept.
Payroll - Minor Op. Dept.
Payroll - Rooms Dept.
Prepaid Expenses
Repairs and Maintenance
Salaries Payable
Sales Revenues- F&B Dept.
110,000
6,000
90,000
80,000
340,000
35,000
200,000
24,000
130,000
20,000
900,000
Sales Revenues - Rooms Dept.
800,000
Sales Revenues - Minor Op. Dept.
100,000
Таx
20%
a) Construct the departmental income statements for the three departments of Hotel
QUIZ. Calculate departmental income percentages.
b) Construct the total income statement of the Hotel Quiz, in proper extended
(alternative) format. Indicate different profit measures from the income statement
and state the management level which is responsible from each profit figure.
c) Indicate what would happen to the hoteľ's net profit if $100,000 revenue shifted
from Rooms Department to F&B Department. Calculate the impact on net profit of
the hotel.
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