3 Problem 9.9S The manager of RitzyRooms, a small 40-room Saskatchewan roadside motel is seeking a $90,000 bank loan bearing a 10 per cent annual rate of interest. Mr Scroogy, the manager of the bank considering the loan application, requires the6 motel to produce a budgeted income statement for next year, 20X1. Mr Scroogy requires this information to help him assess RitzyRooms' credit risk.7 RitzyRooms' accountant has assembled the following schedule of information to facilitate preparation of 20X1's budgeted income statement.Number of single roomsEstimated occupancy of single roomsSingle rooms' projected average room rateAverage contribution earned on single roomsNumber of double rooms1070%$5085%2.3040%$70Estimated oocupancy of double roomsDouble rooms' projected average room rateAverage contribution earned on double roomsOperating fixed costs per annum (not including loan inter ####H#HTax rate levied on profit after deduction of interest exper90%40%Required:a) Assuming the motel is open for 360 days in the year, prepare the budgeted income statement for 20X1. Include the interest on the $90,000 loan in the budgeted statement.

For preparing budgeted Income statement we need to follow the following steps: Firstly we need to…

The manager of RitzyRooms, a small 40-room Saskatchewan roadside motel is seeking a $90,000 bank loan bearing a 10 per cent annual rate of interest. Mr Scroogy, the manager of the bank considering the loan application, requi motel to produce a budgeted income statement for next year, 20x1. Mr Scroogy requires this information to help him assess RitzyRooms' credit risk. RitzyRooms' accountant has assembled the following schedule of information to facilitate preparation of 20X1's budgeted income statement. Number of single rooms Estimated ocupancy of single rooms Single rooms' projected average room rate Average contribution earned on single rooms Number of double rooms Estimated occupancy of double rooms 10 70% $50 85% 30 40% $70 Double rooms' projected average room rate Average contribution earned on double rooms Operating fixed costs per annum (not including loan intei #ean Tax rate levied on profit after deduction of interest exper 90% 40% equired: 20X1 le the interest on the $90.000 loan in the budgeted statement.

The manager of RitzyRooms, a small 40-room Saskatchewan roadside motel is seeking a $90,000 bank loan bearing a 10 per cent annual rate of interest. Mr Scroogy, the manager of the bank considering the loan application, requi motel to produce a budgeted income statement for next year, 20x1. Mr Scroogy requires this information to help him assess RitzyRooms' credit risk. RitzyRooms' accountant has assembled the following schedule of information to facilitate preparation of 20X1's budgeted income statement. Number of single rooms Estimated ocupancy of single rooms Single rooms' projected average room rate Average contribution earned on single rooms Number of double rooms Estimated occupancy of double rooms 10 70% $50 85% 30 40% $70 Double rooms' projected average room rate Average contribution earned on double rooms Operating fixed costs per annum (not including loan intei #ean Tax rate levied on profit after deduction of interest exper 90% 40% equired: 20X1 le the interest on the $90.000 loan in the budgeted statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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