income statement deadline today like 10 hours

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MasterBudget-2-V1-6-Student_TheNewone.xlsx
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COVER PAGE

Submitted To: Don Prynznyk
Course: Hospitality Accounting (ACCT-335-A) Section:A
Submitted By:
Nhung Dinh 833267
Neelanjana Khondkar 847861
Ana Lara 827210

CASE1

DEWEY, CHEETUM AND HOWE - FINE DINING
MASTER BUDGET PREPARATION - PART 2-6
WORTH 30% OF YOUR FINAL GRADE
Because of your financial knowledge you have asked to prepare budgeted financial statements and supporting schedules
for the restaurant's first year of operations. It has been suggested that you prepare this information for each quarter and
for the year. You have been provided with the following researched information to help you with your preparation and you
have also been provided with opening account balances as per section J.
A Budgeted sales for each quarter and the year are as follows:
For the year $835,000
1st quarter 27% 76% is generated from food sales
2nd quarter 23% 24% is generated from beverage sales
3rd quarter 20%
4th quarter 30%
B Your fixed salaries for the year are……………………………………………………………. $199,800
Your variable salaries expressed as a percentage of sales are……………………………. 5.9%
Your employee benefits program costs expressed as a % of total gross salaries………. 10.8%
All salaries are paid in the quarter in which they are incurred. Employee benefits are accrued and paid in the
quarter after the accrual.
C Your quarterly fixed rent expense which is paid on the first of each quarter is……………. $4,000
Your quarterly variable rent expense expressed as a percentage of sales is……………… 5.0%
Variable rent expense is accrued and is paid in the quarter after the benefit is received.
D Your total sales are comprised of:………………...………………………..Credit card sales 70%
……………………………………………………...…………………………………Cash sales 20%
………………………………………………………..………..………………Sales on account 10%
Your credit card commissions expense which is deducted by the financial institution is.. 2.5%
Previous collection experience provides you with information on collection patterns as follows:
Credit cards sales-in the quarter of sale……………………………………………………….. 80%
Credit card sales-in the quarter following sale…………………………………………………. 20%
Sales on account are collected in the quarter following the sale.
E The following other annual expenses have been given and are incurred evenly through out the year and are paid
quarterly as incurred:
Advertising and promotion 15,000 Miscellaneous 1,200
Bank charges 1,200 Office 1,200
Business tax and licenses 7,000 Professional fees 6,000
Delivery 1,200 Printing 4,000
Repairs and maintenance 4,000
Laundry and uniforms 7,000 Supplies 2,000
Telephone 2,400 Travel 2,000
F Utilities are paid quarterly and are incurred monthly as follows: Fixed $350
Variable 0.5% of Sales
G Your initial bank loan (see opening Balance Sheet) was obtained at an interest rate of… 12.0%
and is paid each quarter along with the principal payment of………………………………. $15,000
You are required to maintain a minimum quarterly cash balance of……………………….. $9,000
You have negotiated an operating line of credit of……………………………………………. $50,000
Your annual rate of interest on the operating line of credit is……………………………….. 18.0%
You may borrow and repay loan amounts in increments of…………………………………. $1,000
Continued

CASE2

H Depreciation on assets is as follows: Rate/Time
Leasehold improvements Declining balance method…………………… 28%
Kitchen and bar equipment Declining balance method…………………… 28%
Furniture and Equipment Declining balance method…………………… 28%
China and glass package Straight line method - no salvage value……. 6 Years
I Cost of sales for food expressed as a percentage of food sales is…………………………. 40%
Cost of sales for beverages expressed as a percentage of beverage sales is…………….. 25%
The restaurant would like to maintain ending inventories based on an amount equal to
a specific percentage of next quarters cost of sales:…………………….…...…….for food 15.0%
…………………………………………………………………………………...…for beverages 40.0%
Combined projected food and beverage sales for the first quarter of year 2 are…………… $250,000
All purchases of food and beverages are paid for as follows: In the quarter of purchase…. 67%
………………………………………………………..……In the quarter following purchase… 33%
J The opening account balances as of the beginning of the current fiscal year, January 1:
Inventory-food $10,000 Interest payable $1,250
Inventory-liquor 7,000 R.Dewey, capital 61,946
Prepaid insurance 2,400 O.Cheetum, capital 61,946
Service deposits 2,450 B.Howe, capital 61,946
Leasehold improvements 352,000 M.E.Fine, capital 61,946
Kitchen and bar equipment 120,000 Accounts payable 17,000
Furniture and fixtures 115,000 Cash 10,800
China and glass package 8,000 Benefits payable 666
Operating line payable 10,000 Bank loan payable-long term 290,950
Bank loan payable-current 60,000
K It was decided that the restaurant would be called Dewey, Cheetum, and Howe - Fine Dining
L Label your worksheets as follows: Sheet 1-SALES AND COLLECTIONS
Sheet 2-PURCHASES AND DISBURSEMENTS
Sheet 3-CASH BUDGET
Sheet 4-INCOME STATEMENT
Sheet 5-BALANCE SHEET
REQUIRED: (A) Prepare a sales budget for food and beverages for each quarter and the year. (sheet 1 )
(B) Prepare a detailed schedule of cash collections for each quarter and for the year. (sheet 1)
(C) Prepare a separate purchase budget for food and beverage for each quarter and the year. (sheet 2)
(D) Prepare a schedule of cash disbursements of inventory purchases for each quarter and the year. (sheet 2)
(E) Prepare a cash budget for each quarter and for the year. (sheet 3)
(F) Prepare a budgeted income statement for each quarter and for the year. (sheet 4)
(F) Prepare a budgeted balance sheet for the end of the fiscal year. (sheet 5)

SALES AND COLLECTIONS

DEWEY, CHEETUM AND HOWE - FINE DINING
Sales Budget
For quarters and the year ended
1st quarter 2nd quarter 3rd quarter 4th quarter For the year
Food Sales 171342 145958 126920 190380 634600
Beverage Sales 54108 46092 40080 60120 200400
Total Sales 225450 192050 167000 250500 835,000
DEWEY, CHEETUM AND HOWE - FINE DINING
Cash Collections Budget
For quarters and the year ended
1st quarter 2nd quarter 3rd quarter 4th quarter For the year
Cash 45090 38410 33400 50100 167000
Credit 157815 134435 116900 175350
Sales on Account 22545 19205 16700 25050
1st quarter 123095.7 30773.925 153869.625
2nd quarter 104859.3 26214.825 131074.125
3rd quarter 91182 22795.5 113977.5
4th quarter 136773 136773
Total cash collections 168185.7 196588.225 170001.825 226368.5 761144.25
SALES ACCOUNTS RECEIVABLE
Cash 20% Sales on account of 4th quater collected in the first quarter of year 2 25050
Credit 70% 4th quarter credit sales collected the first quarter of year 2 34193.25
Sales on account 10%
Credit card mission expense 2.50%
Quarter of sales 80%
Quarter of following sales 20%
Sales on accounts are collected
in the quarter following the sale
CC mission expense 1st quater 2nd quater 3rd quarter 4th quarter
3156.3 3477.775 3010.175 4091.5
CC mission expense of
quarter of following sales in 4th quarter 876.75

PURCHASES AND DISBURSEMENTS

DEWEY, CHEETUM AND HOWE - FINE DINING
Purchase Budget For Food
For quarters and the year ended
1st quarter 2nd quarter 3rd quarter 4th quarter The year
BEGINNING INVENTORY 10000 8757.48 7615.2 11422.8 10000 ???
 
ADD: PURCHASES 67294.28 57240.92 54575.6 76129.2 255240
 
COST OF GOODS AVAILABLE FOR SALE 77294.28 65998.4 62190.8 87552 293035.48
 
LESS: ENDING INVENTORY     8757.48 7615.2 11422.8 11400 11400 ???
   
COST OF GOODS SOLD 68536.8 58383.2 50768 76152 253840 Income statement
 
DEWEY, CHEETUM AND HOWE - FINE DINING
Purchase Budget For Berverage
For quarters and the year ended
1st quarter 2nd quarter 3rd quarter 4th quarter The year
BEGINNING INVENTORY 7000 4609.2 4008 6012 7000 ???
 
ADD: PURCHASES 11136.2 10921.8 12024 15018 49100
 
COST OF GOODS AVAILABLE FOR SALE 18136.2 15531 16032 21030 70729.2
 
LESS: ENDING INVENTORY     4609.2 4008 6012 6000 6000 ????
   
COST OF GOODS SOLD 13527 11523 10020 15030 50100
DEWEY, CHEETUM AND HOWE - FINE DINING
Cash Disbursements for Purchases
For quarters and the year ended
1st quarter 2nd quarter 3rd quarter 4th quarter The year
ACCOUNTS PAYABLE 17000 0 0 0 17000
 
CURRENT PURCHASES 52548.4216 45669.0224 44621.732 61068.624 203907.8
 
PRIOR PURCHASES 0 25882.0584 22493.6976 21977.868 70353.624
 
TOTAL CASH DISBURSEMENTS 69548.4216 71551.0808 67115.4296 83046.492 291261.424
Cost of sales for food 40% Purchases are paid for:
Cost of sales for beverages is 25% In quarter of purchase 67%
Ending inventories at a % of next quarters cost of sales: In quarter of following purchase 33%
For food 15% Combined projected food and 250000
For beverages 40% beverage sales for the first quarter of year 2
ACCOUNT PAYABLE
4th quarter purchase paid in the first quater of year 2 30078.576

CASH BUDGET

DEWEY, CHEETUM AND HOWE - FINE DINING
Cash Collections Budget
For quarters and the year ended
Beginning cash 10800
1st quarter 2nd quarter 3rd quarter 4th quarter The year Salaries-fixed for year 199800
Salaries-variable ( as % of sales) 5.90%
BEGINNING CASH 10800 18837.9784 39694.7552 43272.308 10800 Employee benefits 10.80%
Utilities-fixed 350
CASH RECEIPTS: Utilities-variable 0.50%
  Rent-fixed 4000
CASH COLLECTIONS 168185.7 196588.225 170001.825 226368.5 761144.25 Rent-variable (as % of salaries) 5%
 
CASH AVAILABLE 178985.7 215426.2034 209696.5802 269640.808 771944.25 Annual expenses have been given and are
  incurred evenly through out the year and are paid
CASH DISBURSEMENTS: Advertising and promotion 15000
Bank charges 1200
  Inventory purchase 69548.4216 71551.0808 67115.4296 83046.492 291261.424 Business tax and licenses 7000
  Salaries-fixed 49950 49950 49950 49950 199800 Delivery 1200
  Salaries-variable 13301.55 11330.95 9853 14779.5 49265 Laundry and uniforms 7000
  Employee benefits 666 6831.1674 6618.3426 6458.724 20574.234 Telephone 2400
  Rent-fixed 4000 4000 4000 4000 16000 Miscellaneous 1200
  Rent-variable 0 11272.5 9602.5 8350 29225 Office 1200
  Utilities-fixed 1050 1050 1050 1050 4200 Professional fees 6000
  Utilities-variable 3381.75 2880.75 2505 3757.5 12525 Printing 4000
  Advertising and promotion 3750 3750 3750 3750 15000 Repairs and maintenance 4000
  Bank charges 300 300 300 300 1200 Supplies 2000
  Business tax and licenses 1750 1750 1750 1750 7000 Travel 2000
  Delivery 300 300 300 300 1200
Laundry and uniforms 1750 1750 1750 1750 7000
  Telephone 600 600 600 600 2400 Bank loan interest rate 12.0%
Miscellaneous 300 300 300 300 1200 Principal payment 15000
  Office 300 300 300 300 1200 Minimum quarterly cash balance 9000
Professional fees 1500 1500 1500 1500 6000 Operating line of credit 50000
  Printing 1000 1000 1000 1000 4000 Annual rate of interest on the operating line 18.0%
Repairs and maintenance 1000 1000 1000 1000 4000 Borrow/repay loan amounts in increments 1000
  Supplies 500 500 500 500 2000
Travel 500 500 500 500 2000
Interest Expense 1700 315 180 90 2285
Total cash disbursements: 157147.7216 172731.4482 164424.2722 185032.216 679335.658 Payable Accrued
Employee benefit 6990.786
Cash Excess/Deficiency 21837.9784 42694.7552 45272.308 84608.592 92608.5919999998 Rent- variable payable 12525
Borrow/ Repay loan -3000 -3000 -2000 -2000 -10000
Ending Cash 18837.9784 39694.7552 43272.308 82608.592 82608.5919999998
Operating Loan Balance 10000 7000 4000 2000 0 0

INCOME STATEMENT

DEWEY, CHEETUM AND HOWE - FINE DINING
1ST QUATER 2ND QUATER 3RD QUATER 4TH QUATER FOR THE YEAR Beginning cash 10800
Salaries-fixed for year 199,800
Sales 225450.0 192050.0 167000.0 250500.0 835000.0 Salaries-variable ( as % of sales) 5.90%
costs of goods sold-beverage 13527 11523 10020 15030 50100 Employee benefits 10.80%
costs of goods sold-food 68536.8 58383.2 50768 76152 253840 Utilities-fixed 350
Gross profit on sales 143386.2 122143.8 106212 159318 531060 Utilities-variable 0.50%
Rent-fixed 4000
operating expenses: Rent-variable (as % of salaries) 5%
salaries - fixed 49,950 49,950 49,950 49,950 199,800
salaries - variable 13301.55 11330.95 9853 14779.5 49265 Advertising and promotion 15000
benefits 666 6831.1674 6618.3426 6458.724 20,574 Bank charges 1200
rent expense 4000 4000 4000 4000 16000 Business tax and licenses 7000
supplies expense Delivery 1200
miscellaneous expenses 1200 Laundry and uniforms 7000
utilities expenses -fixed 350 350 350 350 1400 Telephone 2400
utilities expenses -variable 1127.25 960.25 835 1252.5 4175 Miscellaneous 1200
Rent-fixed 4000 4000 4000 4000 16000 Office 1200
Rent-variable Professional fees 6000
Advertising and promotion expenses 15000 Printing 4000
Bank charges expense 1200 Repairs and maintenance 4000
Business tax and licenses 7000 Supplies 2000
Delivery 1200 Travel 2000
Laundry and uniforms 7000
Telephone 2400
Office 1200
Professional fees 6000
Printing 4000
Repairs and maintenance 4000
Supplies 2000
Travel 2000
Interest Expense 1700
Total Operating expenses 73,394.8 77,422.4 75,606.3 80,790.7 363,114
Net Income 69,991.4 44,721.4 30,605.7 78,527.3 167946

BALANCE SHEET

DEWEY, CHEETUM AND HOWE - FINE DINING
BUDGETED BALANCE SHEET
AS AT DECEMBER 31,_____________
   
ASSETS
CURRENT ASSETS:  
  Cash  
  Accounts Receivable  
Inventory - food
  Inventory - beverage  
Service deposit
prepaid insurance
TOTAL CURRENT ASSETS
PROPERTY AND EQUIPMENT:  
Leasehold improvements 352,000
Less: Accumulated Amortization
  Kitchen and bar equipment 120,000  
  Less: Accumulated Amortization  
  Furniture and Equipment 115,000  
  Less: Accumulated Amortization
China and glass package 8,000
Less: Accumulated Amortization
TOTAL PROPERTY AND EQUIPMENT
   
LIABILITIES AND OWNERS EQUITY
   
LIABILITIES
CURRENT LLIABILITIES:  
  Accounts Payable  
  Utilities Payable  
  Employee Benefits Payable
  Salaries Payable  
TOTAL LIABILITIES
   
OWNERS EQUITY
  R.Dewey, capital 61,946  
  O.Cheetum, capital 61,946
  B.Howe, capital 61,946  
M.E.Fine, capital 61,946
   
TOTAL LIABILITIES AND OWNERS EQUITY