Question

Ivanka Trump after moving to Pakisatan and has purchase PC hotel Karachi in November 2020 and renamed it Ivayana. The hotel is a 5 star luxury hotel consisting of 100 single rooms 70 double rooms and 40 Suites. The average night stay in a single room costs Rs 8000. Double bed cost Rs 19000 and suite costs Rs 35000. On average 70 single rooms, 60 double rooms and 35 suites are occupied. Besides, there are 4 ball rooms. The ball rooms are always available for booking but they only get booked on Saturdays and Sundays. Each ball room has capacity of 300 people and rental charged for each booking is RS 130,000. 10 Rooms in each category are paid by credit card. The payment is received a week later. 50% amount related to ball room are received in same month and 50% in next month. The rental charge for ball rooms was Rs 100,000 in 2020. The charge for rooms has not changes since last year and have remained same. The hotel is charged local tax of Rs 5000 each week which is paid in the same month. The hotel has a staff of 150 people. 30 kitchen staff which receive 18% of the amount received againts the bill charged for the meals. On average the kitchen staff receive 90 orders for meal with the average billing of Rs 8000 per meal. the amount of meals billed is immediately collected and the kitchen staff is paid in the 1^st week of next month. The room service and the janitorial satff are 40 which are paid Rs 18000/month at last day of same month. 10 is the num of other lower staff for misc services and they are paid 15000/month at last day of same month. The remainig 20 are the senior executive staff, their remuniration details are not shared. The hotel is powered by solar panels and the, its maintenance is outsourced to a company solarex, they charge Rs 200,000 quarterly, which is paid in 2 installments. 50% is paid in the 1^st month of quarter and the rest is paid in the last month of quarter. The opening cash in hand was Rs 100,000.

Prepare Cash budget for the 1^st quarter of 2021.                (PLO 2.1, CLO 1)                                13 marks

Hint: Consider reviewing the actual calendar for 2021.

Answer 1

Answer
5 Star Hotel
Particulars	Single rooms	Double rooms	Suites
No.of Rooms	100	70	40
Single day cost	8000	19000	35000
Occupied	70	60	35
Revenue	560000	1140000	1225000
Credit Card (10Rooms)	80000	190000	350000
Cash	480000	950000	875000
on an average quarter has 90 days
Revenue for the Quarter
Cash	43200000	85500000	78750000
Credit Card (For 83 days)	6640000	15770000	29050000
Credit Card (For 7 days last Quarter)	56000	133000	245000
	49896000	101403000	108045000
Ball Room
Has the capacity of 300 and only filled on Saturdays and sundays
There are nearly 12 weeks in a quarter
So there are 12 saturdays and sundays are there
So total no of bookings	24
So monthly bookings	8
50% received in the same month and remaining 50% will be received in the next month
Only two months amount received during the quarter
Amount received for the current quarter	8*2*130000
	2080000
Amount received during the quarter relating last quarter	8*1*100000
	800000
Ball rooms Rent received	2880000
Local Taxes
5000 each work which is paid in the same month	60000
Staff Salaries
Kitchen Staff -30
18% of the amount received againts the bill charged for the meals
On average the kitchen staff receive 90 orders for meal with the average billing of Rs 8000 per meal
Monthly Kitchen Billing	720000
quarter Billing	2160000
Staff Salary	388800
even though it will be paid in the 1st week of next month.
The last month of previous quarter salaries will be paid in the 1st week of current Quarter
Room service and the janitorial satff -40
Per month Salary	18000
Per quarter Salary	54000
Total room staff salary	2160000
Lower Staff - 10
Per month Salary	15000
Per quarter Salary	45000
Total room staff salary	450000
Maintenance of Solar Panels
Per quarter	200000
Opening Cash	100000
Cash Received from Rooms	259344000
Ball rooms	2880000
Expenses Paid
Kitchen Staff -30	388800
Room service and the janitorial satff -40	2160000
Lower Staff - 10	450000
Maintenance of Solar Panels	200000
Cash at the end of the Quarter	259125200