10-57 Budgets for a Service Firm Triple-F Health Club (Family, Fitness, and Fun) is a not-for-profit family-oriented health club. The club's board of directors is developing plans to acquire more equip- ment and expand club facilities. The board plans to purchase about $25,000 of new equipment each year and wants to establish a fund to purchase the adjoining property in four or five years. The adjoining property has a market value of about $300,000 The club manager, Jane Crowe, is concerned that the board has unrealistic goals in light of the club's recent financial performance. She has sought the help of a club member with an accounting background to assist her in preparing a report to the board supporting her concerns The member reviewed the club's records, including this cash-basis income statement: TRIPLE-F HEALTH CLUB Income Statement (Cash Basis) For Years Ended October 31 (in thousands) 2017 2016 Cash revenues Annual membership fees Lesson and class fees Miscellaneous $355.0 $300.0 180.0 234.0 2.0 Total cash revenues $591.0 $481.5 Cash expenses Managers salary and benefits Regular employees wages and benefits Lesson and class employees' wages and benefits Towels and supplies Utilities (heat and light) Mortgage interest Miscellaneous S36.0 190.0 195.0 16.0 36.0 190.0 150.0 15.5 15.0 35.1 2.0 Total cash expenditures ncrease in cash $496.1 $445.8 $94.9 35.7 10-57 Budgets for a Service Firm Triple-F Health Club (Family, Fitness, and Fun) is a not-for-profit family-oriented health club. The club's board of directors is developing plans to acquire more equip- ment and expand club facilities. The board plans to purchase about $25,000 of new equipment each year and wants to establish a fund to purchase the adjoining property in four or five years. The adjoining property has a market value of about $300,000 The club manager, Jane Crowe, is concerned that the board has unrealistic goals in light of the club's recent financial performance. She has sought the help of a club member with an accounting background to assist her in preparing a report to the board supporting her concerns The member reviewed the club's records, including this cash-basis income statement: TRIPLE-F HEALTH CLUB Income Statement (Cash Basis) For Years Ended October 31 (in thousands) 2017 2016 Cash revenues Annual membership fees Lesson and class fees Miscellaneous $355.0 $300.0 180.0 234.0 2.0 Total cash revenues $591.0 $481.5 Cash expenses Managers salary and benefits Regular employees wages and benefits Lesson and class employees' wages and benefits Towels and supplies Utilities (heat and light) Mortgage interest Miscellaneous S36.0 190.0 195.0 16.0 36.0 190.0 150.0 15.5 15.0 35.1 2.0 Total cash expenditures ncrease in cash $496.1 $445.8 $94.9 35.7
