A small motel with a small dining room has the following estimates for Year 0007:

In July of 0007, the owner plans to buy $30,000 of new equipment (for cash), less a $5,400 trade-in of used equipment. The vending machines contractor will continue to pay the same commission rate in Year 0007.
During 0007, principal payments on a mortgage on the building will be $30,300, and principal payments on a bank loan will be $25,300.
The owner, who is also the only shareholder in the company, plans to pay herself dividends of $42,000 during Year 0007.

a. Prepare a budgeted income statement for Year 0007.

b. Calculate the motel’s cash flow for Year 0007.LO1

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Sales Revenue Rooms sales revenue Dining room sales revenue Cost of sales: dining room Direct expenses Wages expense Rooms expense Dining room expenses Cost of sales: food Other operating expenses Rooms expense Dining room expense Other income (vending machines) $350,000 $150,000 35% of sales revenue 25% of rooms sales revenue 40% of dining sales revenue 25% of rooms sales revenue 40% of dining room sales revenue 35% of dining room sales revenue 5% of rooms revenue 10% of dining room revenue $5,500