Homework Help is Here – Start Your Trial Now!
Business
Accounting
Problem 16 The Milford Motel (MM) has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X7: Account Insurance (fire) Rooms department-salaries and wages Food department-salaries and wages Management fees Supplies and other-food department Food purchases Room sales Interest expense Cost of food sold Food sales A&G-salaries and wages Franchise fees Account Balance $20,000 $ 300,000 $ 200,000 $? $ 40,000 $ 200,000 $1,210,000 $? $ ? $ 450,000 $ 120,000 $ 20,000

Problem 16 The Milford Motel (MM) has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X7: Account Insurance (fire) Rooms department-salaries and wages Food department-salaries and wages Management fees Supplies and other-food department Food purchases Room sales Interest expense Cost of food sold Food sales A&G-salaries and wages Franchise fees Account Balance $20,000 $ 300,000 $ 200,000 $? $ 40,000 $ 200,000 $1,210,000 $? $ ? $ 450,000 $ 120,000 $ 20,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

PLEASE HELP ME

Problem 16 The Milford Motel (MM) has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X7: Account Insurance (fire) Rooms department-salaries and wages Food department-salaries and wages Management fees Supplies and other-food department Food purchases Room sales Interest expense Cost of food sold Food sales A&G-salaries and wages Franchise fees Account Balance $ 20,000 $300,000 $ 200,000 $? $ 40,000 $ 200,000 $1,210,000 $ $ ? ? $ 450,000 $ 120,000 $ 20,000
Transcribed Image Text:Problem 16 The Milford Motel (MM) has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X7: Account Insurance (fire) Rooms department-salaries and wages Food department-salaries and wages Management fees Supplies and other-food department Food purchases Room sales Interest expense Cost of food sold Food sales A&G-salaries and wages Franchise fees Account Balance $ 20,000 $300,000 $ 200,000 $? $ 40,000 $ 200,000 $1,210,000 $ $ ? ? $ 450,000 $ 120,000 $ 20,000
Maintenance-contract Information & telecom. systems-contract Depreciation Heat, light, & power Water Rooms-allowances Marketing expenses-advertising Rent expenses Supplies and other-room department Property taxes A&G-other expenses The Income Statement 135. $ 40,000 $ 30,000 $ 80,000 50,000 20,000 10,000 50,000 10,000 50,000 $ $ $ $ 40,000 $ 60,000 Other information is as follows: 1. The MM borrowed $1,000,000 from the Red Cedar Bank on July 1, 20X7. The annual interest rate is 12 percent. 2. The beginning and ending inventories of food were $7,000 and $5,000, respectively. Food consumed by the food and rooms department employees during the year (free of charge) totaled $1,000 and $3,000, respectively. 3. Fringe benefits and payroll taxes for all employees, excluding free food, are 30 percent of gross salaries and wages. 4. The MM pays an average of 30 percent of its pre-tax income to various governmental units in the form of income taxes. 5. The management fee to be paid to the management company is 2 percent of net room sales and 10 percent of total gross operating profit. 6. An investment in JMB stock that cost $10,000 was sold for $8,000. 7. A computer that cost $15,000 was sold for $2,000. Its accumulated depreciation at the time of sale was $12,000. Required: Prepare an income statement for 20X7 for the MM based on the format of Exhibit 4.
Transcribed Image Text:Maintenance-contract Information & telecom. systems-contract Depreciation Heat, light, & power Water Rooms-allowances Marketing expenses-advertising Rent expenses Supplies and other-room department Property taxes A&G-other expenses The Income Statement 135. $ 40,000 $ 30,000 $ 80,000 50,000 20,000 10,000 50,000 10,000 50,000 $ $ $ $ 40,000 $ 60,000 Other information is as follows: 1. The MM borrowed $1,000,000 from the Red Cedar Bank on July 1, 20X7. The annual interest rate is 12 percent. 2. The beginning and ending inventories of food were $7,000 and $5,000, respectively. Food consumed by the food and rooms department employees during the year (free of charge) totaled $1,000 and $3,000, respectively. 3. Fringe benefits and payroll taxes for all employees, excluding free food, are 30 percent of gross salaries and wages. 4. The MM pays an average of 30 percent of its pre-tax income to various governmental units in the form of income taxes. 5. The management fee to be paid to the management company is 2 percent of net room sales and 10 percent of total gross operating profit. 6. An investment in JMB stock that cost $10,000 was sold for $8,000. 7. A computer that cost $15,000 was sold for $2,000. Its accumulated depreciation at the time of sale was $12,000. Required: Prepare an income statement for 20X7 for the MM based on the format of Exhibit 4.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Payroll Audits
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS