The Sunset Beach Grill The Sunset Beach Grill is a full-service restaurant located in downtown Victoria. The operation serves a very contemporary menu featuring an array of foods sourced locally to a diverse crowd that has consistently praised the establishment for its food, beverages, service and overall atmosphere. Phillip Jackson has recently been appointed as the General Manager and is getting ready to complete the month-end financials for the month of December. Using the information included below, please assist Phillip in completing the operation’s income statement as well as several other ratio calculations. Sunset Beach Grill F&B Financial Information General: 

• The data is for the month of December – 31 days – 

• The Sunset Beach Grill is a full-service restaurant with 70 seats 

• Hours of operation are from 4:30 PM to 10:00 PM 

• The restaurant served 5,890 guests this period 

Sales: The point of sales (POS) captured the following sales data during the period: 

Appetizers $73,000 

Main Courses $60,000 

Desserts $25,895 

Take-Out $16,985 

Coffee/Tea $3,255 

Soft Drinks $2,640 

Beer $7,265 

Wine $27,568 

Liquor $7,500 

Merchandise $1,000 

Other Income: The operation received $500 from the sale of food scraps to a local pig farmer. 

Inventory: The following data is based on inventory management reports: 

Beginning Food Inventory $6,489 

Ending Food Inventory $4,989 

Beginning Beverage Inventory $4,568 

Ending Beverage Inventory $5,689 

Beginning Merchandise Inventory $10,000 

Ending Merchandise Inventory $9,500

 Purchases: The following purchases were made during the period: 

Food Purchases $65,013 

Beverage Purchases $16,598 

Merchandise Purchases $0 

Payroll Data: The following reflects the information collected by the payroll system for the period. 

NOTE: Benefits are calculated as 10% of wages. 

Role # Employees Wage Total Monthly Hours 

Dishwasher 5 $7.95/hour 650 

Line Cook 6 $15.50/hour 1000 

Chef 1 $30.00/hour 220 

Sous-Chef 2 $22.50/hour 400 

Waitpersons 9 $5.95/hour 800 

Hostess 3 $11.95/hour 335

 Office Clerk 1 $12.95/hour 152 

Manager 1 1 $5,085/month Na 

Manager 2 1 $4,425/month Na

Asst. Manager 1 $2,847/month Na 

Administrative and General Expenses: The following are administrative and general expenses: Office Supplies $356 Magazine Subscriptions $110 Cash Shortages $125 Insurance (Liability) $2,572 Data Processing $225 Rental Fees $225 Licenses $125 Professional Fees $650 

Repairs and Maintenance: The following are costs related to repairs and maintenance: Refrigerator Repairs $675 Repair Mirror in Bathroom $550 Janitorial Services $925 Carpenter to repair crown molding damage $275 

Depreciation and Interest: FF&E Depreciation $1,158 Interest Expense $4,195 

Other Costs: The following represents other costs incurred: 

Employee Meals ($3.00/meal x 600 Meals) $1,800 

Complimentary Meals $500 

Jazz Ensemble $6,000 

ASCAP and BMI payments (for music) $150 

Newspaper Advertising $1,650 

Sponsorship of Little League Team $1,000 

Direct Mail campaign $750 

China and Glassware $895 

Cleaning Supplies $1,895 

Paper Supplies $1,952 

Flowers $1,500 

Linen Rentals $1,650 

Waste Removal $125 

Uniform Laundry $1,250 

Kitchen Fuel $915 

Electricity $3,985 

Heating Oil $275 

Rent $8,500 

Fire Insurance for Property $400

Part 1: Create an Income Statement 

1. Use the information included above to complete the income statement fields. Input your figures in the grid/template included below. 

Income Statement Sales $ % 

Food Beverage Merchandise & Other Total Sales Cost of Sales Food Beverage Merchandise & Other Total Cost of Sales Gross Profit Food Beverage Merchandise & Other Total Gross Profit Labor Management Staff Employee Benefits Total Labor Prime Cost Other Controllable Expenses Direct Operating Music & Entertainment Marketing Utilities Admin. & General Repairs & Maintenance Total Other Controllable Expenses Controllable Income (Manager’s Operating Income) Non-Controllable Expenses Occupancy Costs Equipment Leases Depreciation & Amortization Total Non-Controllable Expenses Operating Income Corporate Overhead Interest Expense Other (Income) /Expense Total Income Before Taxes 

Part 2: Calculating Financial Ratios Supplementary Financial Information – From Balance Sheet Current 

Assets $954,678 

Current Liabilities $632,915 

Total Assets $2,876,521 

Total Liabilities $995,376 

2. Use the information included above (both sections) to calculate the financial ratios included below. Input your figures in the grid/template provided. Financial Ratios Food Cost Percentage Beverage Cost Percentage Labor Cost Percentage Average Food Service Check Seat Turnover Profit Margin Average Food Inventory Food Inventory Turnover Solvency Ratio Current Ratio

Income Statement - Line Descriptions 

• Food Sales – all food sales as well as non-alcoholic beverages

• Beverage Sales – all alcoholic beverage sales 

• Merchandise – all merchandise sales 

• Food Cost – costs of food and non-alcoholic beverages 

• Beverage Cost – costs of alcoholic beverages 

• Merchandise – costs of non-food or beverage items 

• Gross Profit – sales minus cost of sales 

• Payroll Mgmt. – all wages paid to mgmt. staff 

• Payroll Staff – all wages paid to hourly staff 

• Employee Benefits – includes the costs of all benefits provided to employees 

• Prime Cost – total cost of sales and labor 

• Direct Operating Expenses – costs associated with providing services to customers 

• Music & Entertainment – costs associated with music and entertainment 

• Marketing – costs associated with market research, communications and promotions 

• Utilities – all utility costs 

• Admin & General – costs of items needed to run the operation and not connected to guest service 

• Repairs & Maintenance – costs associated with all repairs and maintenance of building & equipment 

• Controllable Income – total sales minus controllable expenses 

• Occupancy Costs – rent, property taxes & property insurance 

• Equipment Leases – costs of leasing equipment or furniture 

• Depreciation & Amortization – includes costs of depreciation and amortization of assets 

• Operating Income – total income prior to overhead, interests, etc. – total sales minus the sum of controllable and uncontrollable expenses 

• Corporate Overhead – applicable to multi-unit operations 

• Interest Expense – cost of borrowing money 

• Other (Income)/Expense – cost (or income) generated from activities outside scope of operations 

• Income Before Taxes – operating income minus corporate overhead plus interest expense plus other (income) or expense