The Warwick Motel has two major operating departmentsrooms and food. The following information is supplied to you
Question:
The Warwick Motel has two major operating departments—rooms and food. The following information is supplied to you as of December 31, 20X6:
Account Title Account Balance Insurance (Fire) $ 5,000 General Manager’s Salary (Adm. & Gen.) 30,000 Salaries and Wages—Rooms 80,000 Salaries and Wages—Food 60,000 Supplies—Food 20,000 Food Purchases 55,000 Room Sales 380,000 Interest Income 1,000 Interest Expense 21,000 Cost of Food Sold 2 Food Sales 180,000 Wages (Adm. & Gen.) 25,000 Advertising 10,000 Property Operation and Maintenance 30,000 Depreciation 30,000 Heat 15,000 Power and Lights 12,000 Supplies and Other—Rooms 30,000 Property Taxes 12,000 Other Expenses—Adm. & Gen. 10,000 Other information is as follows:
1. The beginning and ending inventories of food were $2,000 and $3,000, respectively.
2. Fringe benefits and payroll taxes for all employees are 15% of salaries and wages.
3. The Warwick Motel pays an average of 25% of its pre-tax income to the various governmental units in the form of income taxes.
Required:
Prepare an income statement for 20X6 for the Warwick Motel based on the USALI. (If you do not have a copy of the USALI, use Exhibit 4-2 as a guide.)
Step by Step Answer:
Financial Management For The Hospitality Industry
ISBN: 9780131179097
1st Edition
Authors: William P Andrew, James W Damitio