Master Budget Development Estimated
Not what you're looking for?
The Garden Hotel is in the process of developing a master budget and pro-forma financial statements. The beginning balance sheet is estimated to be:
Garden Hotel
Estimated Balance Sheet
Cash $20,000 Accounts Payable $20,000
Accounts Receivable $30,000 Notes Payable $500,000
Facilities $3,010,000 Capital Stock $100,000
Accumulated Depreciation ($1,100,000) Retained Earnings $1,340,000
Total Assets $1,960,000 Total Liabilities and Equity $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 amount is expected to be $30,000.
a. Prepare the expected income statement.
b. Prepare (in good form) the expected cash flow statement.
c. Prepare the expected balance sheet.
Purchase this Solution
Solution Summary
The master budget development estimation is examined.
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations