The Gold Bay Hotel is in the process of developing a master budget and pro-forma financial statements for 1999. The beginning balance sheet for the fiscal year 1999 is estimated to be:

Gold Bay Hotel

Estimated Balance Sheet

1/1/99

Cash $ 20,000 Accounts Payable $ 20,000

Accounts Receivable 30,000 Notes Payable 500,000

Facilities 3,010,000 Capital Stock 100,000

Accumulated Dep. (1,100,000) Retained Earnings 1,340,000

Total Assets $1,960,000 Total Equities $1,960,000

During the year the hotel expects to rent 30,000 rooms. Rooms rent for an average of $90 per night. The hotel expects to sell 40,000 meals during the year at an average price of $20 per meal. The variable cost per room rented is $30 and the variable cost per meal is $8. The fixed costs not including depreciation is expected to be $2,000,000. Depreciation is expected to be $500,000. The hotel also expects to refurbish the kitchen at a cost of $200,000, which is capitalized (included in the facility account). Interest of the note payable is expected to be $50,000 and $100,000 of the note payable will be retired during the year. The ending accounts receivable amount is expected to be $40,000 and the ending accounts payable is expected to be $30,000.

Prepare pro-forma financial statements (Income Statement, Cash Flow, and Balance Sheet) for the end of the year.