The Wilson Motel has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X6. Account balance $ Аccount Insurance (fire) Rooms department - salaries and wages Food department - salaries and wages Supplies - food department Food purchases 5,000 80,000 60,000 20,000 55,000 Room sales 380,000 Interest income 1,000 Interest expense Cost of food sold ? Food sales 180,000 A & G - wages Advertising 50,000 10,000 Maintenance - contract 20,000 Depreciation 50,000 Нeat 15,000 Information & telecom. Systems - contract Power and lights 10,000 12,000 Franchise fee 30,000 Supplies and other - rooms department Property taxes A & G - other expense 30,000 12,000 10,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1. The Wilson Motel borrowed $50,000 two year ago from the Wilmore Savings and
Loan. On June 30, 20X6, the first non-interest payment is made to Wilmore of $10,000.
The funds were borrowed at an interest rate of 10%.
2. The beginning and ending inventories of food were $2,000 and $3,000 respectively.
Food consumed by the food and rooms department employees during the year (free of charge)
totaled $500 and $300, respectively.
3. Benefits and payroll taxes for all employees, including free food, are 20 percent of
gross salaries and wages.
4. The Wilson Motel pays an average of 25 percent of its pretax income to the various
gouvernmental units in the form of income taxes.
5. The management fee to be paid to the management company is 3 percent of room sales
and 10 percent of total income after undistributed operating expenses.
Required
Prepare a summary income statement for the Wilson Motel.
Transcribed Image Text:Other information 1. The Wilson Motel borrowed $50,000 two year ago from the Wilmore Savings and Loan. On June 30, 20X6, the first non-interest payment is made to Wilmore of $10,000. The funds were borrowed at an interest rate of 10%. 2. The beginning and ending inventories of food were $2,000 and $3,000 respectively. Food consumed by the food and rooms department employees during the year (free of charge) totaled $500 and $300, respectively. 3. Benefits and payroll taxes for all employees, including free food, are 20 percent of gross salaries and wages. 4. The Wilson Motel pays an average of 25 percent of its pretax income to the various gouvernmental units in the form of income taxes. 5. The management fee to be paid to the management company is 3 percent of room sales and 10 percent of total income after undistributed operating expenses. Required Prepare a summary income statement for the Wilson Motel.
The Wilson Motel has two major operated departments: rooms and food.
The following information is supplied to you as of December 31, 20X6.
Account balance
$
Асcount
Insurance (fire)
Rooms department - salaries and wages
Food department - salaries and wages
Supplies - food department
Food purchases
5,000
80,000
60,000
20,000
55,000
Room sales
380,000
Interest income
1,000
Interest expense
?
Cost of food sold
?
Food sales
180,000
A & G - wages
50,000
Advertising
Maintenance - contract
Depreciation
10,000
20,000
50,000
Нeat
15,000
Information & telecom. Systems - contract
Power and lights
10,000
12,000
Franchise fee
30,000
Supplies and other - rooms department
Property taxes
A & G - other expense
30,000
12,000
10,000
Transcribed Image Text:The Wilson Motel has two major operated departments: rooms and food. The following information is supplied to you as of December 31, 20X6. Account balance $ Асcount Insurance (fire) Rooms department - salaries and wages Food department - salaries and wages Supplies - food department Food purchases 5,000 80,000 60,000 20,000 55,000 Room sales 380,000 Interest income 1,000 Interest expense ? Cost of food sold ? Food sales 180,000 A & G - wages 50,000 Advertising Maintenance - contract Depreciation 10,000 20,000 50,000 Нeat 15,000 Information & telecom. Systems - contract Power and lights 10,000 12,000 Franchise fee 30,000 Supplies and other - rooms department Property taxes A & G - other expense 30,000 12,000 10,000
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