The Gold Bay Hotel Is in the Process of Developing

Essay

The Gold Bay Hotel is in the process of developing a master budget and pro-forma financial statements. The beginning balance sheet for the current fiscal year is estimated to be: $\begin{array}{c}\text { Gold Bay Hotel}\\\text { Estimated Balance Sheet}\\\text { Current Year}\\\begin{array}{|l|r|l|r|}\hline\text { Cash } & \$ 20,000 & \begin{array}{l}\text { Accounts } \\\text { Payable }\end{array} & \$ 20,000 \\\hline \begin{array}{l}\text { Accounts } \\\text { Receivable }\end{array} & 30,000 & \begin{array}{l}\text { Notes } \\\text { Payable }\end{array} & 500,000 \\\hline \text { Facilities } & 3,010,000 & \text { Capital Stock } & 100,000 \\\hline \begin{array}{l}\text { Accumulated } \\\text { Dep. }\end{array} & \$ 1,100,000) & \begin{array}{l}\text { Retained } \\\text { Earnings }\end{array} & 1,340,000 \\\hline \text { Total As sets } & \$ 1,960,000 & \text { Total Equities } & \$ 1,960,000\\\hline\end{array}\end{array}$ 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.
Required:
Prepare pro-forma financial statements for the end of the current year.