Use the following information to prepare the Operating Budget, to include the full calculation of the rooms revenue using the double differential formula and expenses forecast. Once you have completed the Operating Budget, you will be able to prepare a Cash Flow Budget The Maple Leaf Motel has 15 rooms and it open year round. However, the motel closes for 15 days of vacation in January. It has no food or beverage facilities. We′ll assume you would like to achieve a net after-tax income of approximately $30,000 for the year, which is a 10% return on equity of $300,000 The factors and trends expected to affect your business: The Maple Leaf Motel has been in business for 20 years and you has developed a solid relationship with your repeat guests. You do not anticipate any major changes in demand However, a local resort of comparable facilities has just gone out of business. As a result, you feel your annual occupancy should increase by 8%. The local economy has been affected by the recent pandemic causing a general increase in prices of 10%. Some rooms will require small renovations , $37000 will be spent in June and $25000 will be spent in December Your marketing budget is $10500 for first half of the year and $11500 for remainder of the year Administrative and general expenses are estimated at $ 5700 for Jan- June. and $6480 for July – December. Estimate Telephone revenues at $3.50 per occupied room night and Other income at 1% of total reveunes. The owners withdrew $9000 semi annually as drawings from the business and managed to repay $1450 monthly in debt to the local bank The owners withdrew $5000 semi annually as drawings from the business and managed to repay $850 monthly in debt to the local bank The cash flow statement is used to predict cash requirements throughout the year. Calculate how much cash is available if 47.5% of income and expensed are in the first half
