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 staff are 40 which are paid Rs 18000/month at last day of same month. 10 is the number 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.   

Hint: Consider reviewing the actual calendar for 2021.

Answer 1

5 Star Hotel
Title	Single rooms	Double rooms	Suites
Number of Rooms	100	70	40
Single day	8000	19000	35000
Occupied	70	60	35
Revenue	560000	1140000	1225000
CC(10Rooms)	80000	190000	350000
Cash	480000	950000	875000
average quarter (90 days)
Revenue - Quarter
Cash	$43,200,000	$85,500,000	$78,750,000
CC(For 83 days)	$6,640,000	$15,770,000	$29,050,000
CC (For 7 days-last Quarter)	$56,000	$133,000	$245,000
	$49,896,000	$101,403,000	$108,045,000
Ball Room
Has the capacity of 300 and only filled on Saturdays and sundays
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
	$800,000
Ball rooms Rent received	$2,880,000
Local Taxes
5000 each work which is paid in the same month	$60,000
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	$720,000
quarter Billing	$2,160,000
Staff Salary	$388,800
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	$18,000
Per quarter Salary	$54,000
Total room staff salary	$2,160,000
Lower Staff - 10
Per month Salary	$15,000
Per quarter Salary	$45,000
Total room staff salary	$450,000
Maintenance of Solar Panels
Per quarter	$200,000
Opening Cash	$100,000
Cash Received from Rooms	$259,344,000
Ball rooms	$2,880,000
Expenses Paid
Kitchen Staff -30	$388,800
Room service and the janitorial satff -40	$2,160,000
Lower Staff - 10	$450,000
Maintenance of Solar Panels	$200,000
Cash at the end of the Quarter	$259,125,200

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