Bill Valler is considering investing in a new restaurant but is concerned about the potential profitability. He provides you with the following information:

1. The 100-seat restaurant would be open 3 meal periods, 7 days a week.

Assume the first day of the 365-day year is a Monday.

2. The expected seat turnover by meal period by day of the week is as follows:

Breakfast Lunch Dinner Monday 12 2.0 6 Tuesday 13 eek vs Wednesday 1.4 an 7.
Thursday 1.4 Zid 8 Friday 13 2.0 Sf Saturday om 8 1.0 ie3 Sunday ag Ms) a)
3. The average checks by meal period are as follows:
Breakfast $2.75 Lunch $5.20 Dinner $8.15 4. Additional miscellaneous sales of candy and so on are expected to be 1% of total food sales.
5. Cost of food sales is expected to be 30% of food sales, and the cost of miscellaneous sales is expected to be 25% of such sales.
6. Labor costs are expected to consist of $100,000 annual fixed costs and 15% of food sales.
7. Other variable costs are expected to be 12% of total sales.
8. Annual fixed charges are expected to include the following:
Depreciation $50,000 Property taxes 20,000 Insurance 15,000 Interest expense 30,000 9. Assume the restaurant would have an average tax rate of 15%.
Required:
1. Prepare a pro forma operating statement for the first year.
2. Assume sales prices and customer counts increase 5% per year. Further assume fixed costs increase 3% per year. Prepare a pro forma operating statement for the second and third years.