Maartement Accounting Assignment-4 (Due 11:59 pm on march 241 You have the following annual information about Moonlight Bar and Grill, which consists of three different operating segments. Moonlight Bar and grill Income statement For the Year ended December 31, 2020 dining room Bar Area outdoor Patio total Sales Revenue $206.900 5156,800 $185.000 $549,700 Direct Costs 164.000 145.000 152,000 Contribution Income $11.800 $34.000 38,700 Indirect Costs 63.000 Operating Income 525,700 The owner wants to allocate indirect costs to each area based on square footage, to analyze how each segment of the restaurant is performing. The dining room is 3,300 square feet, the bar area is 1,500 square feet and the outdoor patio is 1,200 square feet. required a) Allocate the indirect costs as indicated. Sales Revenue Direct Costs Contribution Income Indirect Costs Operating Income Moonlight Bar and grill Income statement For the Year ended December 31, 2020 dining room Bar Area outdoor Patio 206 900 456 800 186 000 464 000 145 000 452000 42.900 11800 34000 34650 15 750 42600 82.50 -3950 21400 total 5497700 454000 88 700 63000 25 700 b) The owner of the restaurant has an offer from a smoothie shop to rent the bar area for $7,000 per year. Rent does not include any of the indirect costs; they will have to be absorbed by the other segments. Prepare a revised income statement and advise the owner if this if an acceptable offer or not. Moonlight Bar and grill Income statement For the Year ended December 31, 2020 Sales Revenue 549.700 Direct Costs 46.000 Contribution Income 88.700 Indirect Costs 6500 Income before Rent 82400 Rental Income 7000 Operating Income The restaurant owner took another look at the various indirect costs and, on further analysis, discovered that some indirect costs would change, as shown below. Administrative Expense Advertising Expense Insurance Expense Repairs Expense Utilities Expense total Current Indirect Costs if Bar Area Costs rented $32,000 $29,000 12,000 3,000 6.000 4,200 3,000 2.300 10.000 7.500 563.000 $51.000 of the bar area is not operated, it is estimated that outdoor patio sales revenue will decrease by 30% and direct costs will decrease by $20,000. Dining room sales revenue and direct costs will not be impacted. Prepare a revised income statement. With this new information, should the owner accept the offer? total Moonlight Bar and grill Income statement For the Year ended December 31, 2020 dining room outdoor Patio Sales Revenue Direct Costs Contribution Income Indirect Costs Income before Rent Rental Income Operating Income