Hospitality Industry Managerial Accounting HRT 374

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Hospitality Industry Managerial AccountingHRT 374

• Chapter 1
• Introduction to Managerial Accounting

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Outline

• Overview
• The Accounting Function
• Principles of Accounting
• Branches of Accounting
• Accounting Equation
• Forms of Business Organization
• Ethics

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Why were different from other industries

• Seasonality
• Short Distribution Chain
• Short Time Span
• Labor Intensive
• Investment in Fixed Assets

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Principles of Accounting (GAAP)

• Cost
• Business Entity
• Going Concern
• Unit of measurement
• Objective evidence
• Full disclosure

• Consistency
• Matching
• Conservatism
• Materiality
• Cash vs. Accrual Accounting

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Branches of Accounting

• Financial
• Cost
• Managerial
• Tax
• Auditing
• Systems

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Accounting Equation

• Assets Liabilities Owner's Equity
• Or
• OE A - L
• Debits Credits

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• Assets
• Assets
• dr cr
• --

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Liabilities

• Liabilities
• dr cr
• --

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Owners equity

• Owners equity
• dr cr
• --

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• Assets Liabilities Equity
• Assets Liabilities Equity
• dr cr dr cr dr cr
• -- -- --
  

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Forms of Business Organization

• Sole Proprietorship
• Partnership
• Limited Partnership
• Corporation
• S Corporation
• Limited Liability Company

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Ethics

• Is it legal?
• Is it fair?
• Does it hurt anyone?
• Are you honest with everyone?
• Can you live with it?
• Would you publicize it?
• What if everyone did it?

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Homework Ch. 1 HRT 374

• Problems 3, 4, 6, 9, 10,11,15

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Problem 3

• Beg Cash balance 650
• 1 rec cash on acct 300
• 2 rec cash from sales 700
• 3 paid p/r taxes -450
• 4 purchased -1,000
• 5 rec cash 5,000
• Paid 2,000
• Cash balance 3,200

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Problem 4

• Sole proprietorship
• S corp
• Limited partnership
• Sole proprietorship
• C corp
• General partnership

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Problem 6

• Matching
• Conservatism
• Continuity
• Materiality
• Full disclosure
• Consistency
• Business entity
• Cost

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Problem 9

• Sunday 40/90 44.4
• Monday 80/90 88.9
• Tuesday 75/90 83.3
• Wednesday 77/90 85.6
• Thursday 82/90 91.1
• Friday 52/90 57.8
• Saturday 45/90 50.0
• Weekly occupancy total rooms sold 451
• Total rooms available 630
• Occupancy for week 71.6

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Problem 10 Total rooms 40

• month days in month avail
  sold
• Jan 31 1,240 400
• Feb 28 1,120 600
• Mar 31 1,240 700
• Apr 30 1,200 840
• May 31 1,240 960
• Jun 30 1,200 980
• Jul 31 1,240 992
• Aug 31 1,240 973
• Sep 30 1,200 800
• Oct 31 1,240 705
• Nov 30 1,200 650
• Dec 31 1,240 500

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Problem 10 (continued)

• Available totals sold Occ.
  
• Summer 4,920 3,905 79.4
• Off-season 9,680 5,195 53.7
• Entire year 14,600 9,100 62.3

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Problem 11

• 1. S corp because
• Avoid double taxation
• Liability is limited to investment
• In control as long as majority
• 2. Discuss

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Problem 15

• 5,000,000 4,500,000 500,000
• 5,000,000 (67.4) 3,370,000
• 5,000,000 (15.0) 75,000
• 4,500,000 (45.1) 2,029,500
• 4,500,000 (5) 225,500