Problem 14 Solution Wilson Motel Summary Income Statement For the Year Ended December 31 20X6 Net Revenues Operated Departments Rooms Food Rental and Other Income Total Operated Departments 380 000 1 96 300 180 000 3 53 200 2 72 500 1 000 561 000 53 200 168 800 Undistributed Operating Expenses Administrative and General Sales and Marketing Property Operation and Maintenance Utilities Total Undistributed Expenses Totals Payroll Related Expenses Cost of Sales 4 60 000 60 000 561 000 53 200 228 800 Other Expenses Income Loss 30 000 20 000 50 000 253 700 34 300 1 000 289 000 10 000 40 000 30 000 27 000 107 000 70 000 40 000 30 000 27 000 167 000 157 000 122 000 Gross Operating Profit Management Fees Income before Fixed Charges Property Taxes and Insurance Depreciation Net Operating Income Interest Expense Income before Income Taxes Income Taxes 5 6 Net Income Calculations 1 Rooms Dept Payroll and Related 80 000 1 2 300 food 2 Food Dept Payroll and Related 60 000 1 2 500 food 3 Cost of food sold B I 1 1 Purchases E I 12 31 Cost of Food Used Free food COFS 4 Admin and Gen Payroll and related 50 000 1 2 60 000 5 Management fees 380 000 03 122 000 1 23 600 6 Interest Expense 50 000 1 5 40 000 1 5 4 500 122 000 23 600 98 400 17 000 50 000 31 400 4 500 26 900 6 725 20 175 96 300 72 500 2 000 55 000 3 000 54 000 800 53 200