UNIFOR M SYSTEM OF ACCOUN TANCY

PARTS
UNIFORM SYSTEM OF ACCOUNTANCY
Uniform accounts is used by several hotels/ restaurants of the same accounting
(costing IK
and sales) principle and I or practices. Uniform accounting .is thus not a separa
te ·
technique or method .~It simply denotes a situation in which number of hotels/ restaur
ants
may use the same accounting (costing·aodsales.) principle in such a way as to
produce
costs and sales which are of maximum comparability because from such costs
an~ t r
sales, valuable conclusion can be drawn and one hotel can,be compawstto ot~ts.
extent of application of uniform accounting principles depends on the circumstance
~he I~
s of
each case.

Many schemes of uniform accounting system have been intmduced in the last
century
and ·a few of them are still in use. the most successful uniform system of accoun
ting
was the one introduced by the ·Federation of Master Printers in 1911 and the
most
successful system in hot~I industry was introducecrin -M~;h·-19~6 b he
Hotel
Association of New York City_fillQ,.Ju.S~~J 2~L,,J.~26 the 6_~...~L!f~~tQ__, o~ I.
teL.fil!QJA.o: .I
~~~o~.t~~2IL9.Lth~-N-91,b_.t,~~!ic~ ad~J?.!~clJ.he same ans.L@g.9.!!l!!'e_nd~d its membe
rs to
adopt it~ I

;n,e success of Uniform Accounting System depends on_the removal of the

following djJficulties. ·
. 1. s x i s t e ~ ~ n , mutual trust ~nd a~~y_of give and take amongst
the
participating member hotels / restaurants.
2. ·Free exchange o!J.2Es and Technology, ~~~~l~_gge amongst the member hotels
/ restaurants. · - ----·-
3. Free exchange of information regarding system of costing stocks, depreciation
etc. - ·-· , ,
- -- -· _. - - - - ·-·
4. Absence of rivalry and sense o!J_galg_usy amongst the member hotels/ restaurants.
5. Use of common headstorecord sales of hote~ like Room S_ale, Food Sc!le_,_Be_ y~rage
, '
Sale, Laundry Income, Tel~phone Income, Kealth Club .. and· Swimming Pool
-.. ._.. __ . - ·t __.... . ..... '" . . . .
Income, e c. .. .... -- ··• ...____ ' ." ... .....·-·-----·--· -·--
6. Oseo l'common terminology and procedure regarding cost apportionment
and
cost control. - - - -- ~-...--·-·-- ·~--~~-- ---·· · · ·· · ... · .. · J.,_

A It may be noted the accounting system of hotels I restaurants ma

~ widely on
.,./ . the account of the following reas.ons :
--~t,"'.
klf.,""'' 'r,!'.•;~rr,- •· ' ~· z;...-
J f,J
. ., rJ
1. Size of Business: ln_a small hotel/ restaurant/ guest house, the owner with the
tt/ l
(223)
~
 S,J.<
elp of family members may perform most of th_~--f~_!'lf1i.on himself and he may use
his
personal k1fch n for prepari~~ fo~d f~~ ~h~--9~~~~~:~~erea~~~~~ ~ge hotels the
job is
divi ad -amongst departments and sections and cost allocat,on 1s re1Tffit ed ·tcfblrd
dlfterently:·- -·· - -....._. ~' onB
. --·- -----~--,------ ---
2;---Met~of! _Q..( Ptoduc.tion : Some sm~ hotels may .find it convenient to buy
the
food and beverage items from ,outsiae a_nd sell it to t~..e QU~sts by adding their margin
of .
-~ Whereas, l~e h~tels firia it m~;e -~cg1'omical to_cooltt'ti"~1n~~°!~§~~~r~~i~-~ f\.
~ ,~
guests. _ ~a)4 #"kl,,~ ,/ H~i __ l ~ '}f\<JfO -~
3. Difference irl Appodion!_~nt : There can be a lafge degreee~«~;~~~e 1n the(Jii

~~~~~ti~(';:~:~,e=rc~ns8 <i~~re~~.~\~Ou~~is!~~~tt~.~1Jj-~;~ ~f-~~Etv:~'

, (µ-~"t ~.l~~.1 . ) ~\ _ ~ ""\ JlJ.. ~
1'
t-
Where a Uniform Accounting System is introduced there must be some uniform
ity in fa
. the tre_
atment of_-~al~S~D§cft~filJ~~9.~~r~~:::~Y.n!!mLe:~=~~ ~_res. ' t
IL\ T~e foll~W,lng l~~or!ali(~afi"ers equfre unifor~ity of treat,:n~
~ : ·Sales ~ccountmg_;:r · ·and pnnc _e: . e _
_ . ~
s:_ or ferent departments _1
and o~tlets ·s~ie,i",inusUieJinalized so t_
~~a!!~ help in comparing the_~h~~~~' at e~ch h'otel ·and restaurant foflows-tne·s ame ~
" gJ.:g__ueJ1·oteLwjtl1vottwJ. f .,~.-~-~-=---.a"

2. General classification of -accou

--nts : There - f
must be clear distinction about
-
direct cost, in_gifJiQ,t.£2.§,tfQQQ_£?St (variable cost), labour head, qverheads, etc.
~

- .
~,r.._.i:;;r•.!

. ..
-.;_,._ .,..,.

3. . Allocation and apporticfnment of overheads : _The hotels / restaurants

/ '-, . '.Pf.~..-·- ·. . .... - -.'l:,a.,.~fl."""- f
should
be divided amongst -suitable cost ce~~ and the ~~1,.!!2~. .c!PJ)filQDIIleq
t and
allocation should be fixed so that all membets follow the same princigles. The overhe
ads
of the -ho.tels./ resfaurantsshould also beab59rbe<Tunfformly'."'"''~'"'"" ·
~ - The member hotels and restaurar,_ts ~nder uniform accounting system
~
!-:·~should have the agreement on the fol/owmg items :
~ .. ~ a) M~tho~~t Q,W)J§:,C-i~tio.n and of gri~ingJ21 m~terial s~ould be adop~ed .

! ~)
..,?'~--· b) If inte . s _:. ; ~aRrtal -should be debited and ,t so then on what basis.
I oiJon jnter-esf..gL.re~lt£YlQ. b.~·charg. ed on land and building own.ed by the hotel.
lu . d) How astag_g§,.,eomplem~m~ryfQ.Q.Q_~ J__Q_guests ~D9...~~~f_f _§b9Yld .be.treated.
l e) On what r~t~ overtime, conveyance, etc..~g__ !>e paid.
- ·-·-----·

ADVANTAGES OF UNIFORM ACCOUNTING SYSTEM

/ # ' '

The following are the advantages of Uniform Aooounting System :

1. Tran.sfer : The staff can be transferred from one ·hotel to t_

he other very easily as
(224)

I·,
. \;

'"'-
 UNI FOR M SYS TEM OF ACCOUN
TANCY
due to sam e accounting system it doe
hotel. s not take·· long for the staff to adjust
to the new
· ·
2. Comparison ~ Since hotels are followin
g the same accounting system so the
can be com par ed am ong st each oth y
er. One can find out the causes for hig
lower sales and can take corrective her costs o~
measure. ·
-
3. . B~ying S~ares: General pub li~o
; financial institutions can compare the
profltab1hty and 1t hel ps the m hotels
take over or to pay as a loan. in deciding the price. They should pay to buy the equity,
4~ Lease or Rent :git is easy to decide on the rent or a lease
resta~rants. Bot~ t~a nt and own~r for the hotels / .
can study and compare the exeenditur
of var iou s hot els / restaurants ana e and incom3
1nis will help to decide on the rental
mo ney for, lhe hot el/ restaurant on value or lease
-== yearly or season basis. - -~- - - --~-
As it has bee n dis cus sed in the above
that it is not easy to introduce Uniform
System. In fac t kee pin g in view, the Accounting
heterogeneous industry like hotels, airli
restaurants, clubs, etc, and moreover nes, catering,
, they are located at different places and
sizes and pro vid ing different types of of different
services, it becomes more difficult to hav
Acc oun ting Sys tem . e a Uniform

In Ind ia hot els to sav e inc om e tax

and other taxes do not at times show
the con trar y at tim es hot els show actual sale; on
more sale then the ~ctu~I to make t_h
look ros ier. Du e to hig h depreciati e balance sheet
on allowed hotel's m spite of showing
able to sav e inc om e tax and can con more sale are _
vert ~lack money to whilte m0ney. Thu
not foll ow the Un ifor m Sys tem of Acc s hotels do
ounting.

· schedu/es are accepted by a group

The fol/ow,ng of resta 1 rants to have uniformity
in the acc.ounting system. These sch
edules are as follow :

D1 FOOD SALE B, -
Kvoni
{
D2
03
BEVERAGE SALE
OTHER INCOME
S ~
2
Pvo q
04 SALARY AND WAGES }23 -- Liq_w __.
05 EMPLOYEE'S BENEFITS
06 DIRECT OPERATIONAL EXPENSES rs - r ~J.j •-~
~
07 MUSIC AND ENTERTAINMENT r\--
~ ~ -- ~ t'fhr ~
A

08 MARKETING EXPENSES ,1
09 ENERGY EXPENSES
0 1Q. ADMINISTRATIVE AND GENERAL EXPE
NSES
01 1 REPAIRS AND MAINTENANCE
0 12 RENT AND RATES
01 3 OTHER EXPENSES
(225)
 HOTEL ACCOUNT, FINANCIAL AND F & B MANAGEMENT

D 14 DEPRECIATION
D 15 INTEREST
D 16 INCOME TAX

(D 1) Food Sa.le : Schedule D 1 for food sale is designed initially

to show the number
of meals served and amounts.by meal period and secondly by dining
area. Food sales
in~lude sales of tea, coffee, fresh juices, foo.d, bakery products
sold at restaurants,
room service, banquets, etc.

(D 2) .Beverage Sale .: This includes the sale of aerated drinks

, canned juices, Beer,
Wirye,.: Gocktails, ·Hard .drinks, ,.etc.- , The beverage sale of bar,
room service ·bar and
.
beverage sale shown by other outlets is included and shown as
Beverage Sale:
(0-3) Other lnc~me : Other income includes income from
swimming pool, ·floweriest
shQP, health ·clu.b.•Jn~ome from beauty parlour,· etc. Net income means sale
less cost of
sa·Ie-is shown as income under the head Other Income.
·
Income from re_ntals, interest and dividends earned should be
.shown.as addition to
income on the summary statement of income and should not
be reported on this
sct,edule., •v·

(D 4.) ,-Salary and Wages : Salary and wages paid to permanent

staff, contractual staff
and paid to ·porte r.Jar cart&ge should be in.eluded under the head
salary and wages.
The salary or remuneration paid to the owner is not included under
the head salary and
wages.
. . . ,
,;:• , ~. ~
(D.5)
'

Employee's Benet-it$ : ,..Employe.e ,bene-fits i.r;,clude medical bene

fit or .re
imbursement, Contributory ProvidentFund or.Insurance Fund, .Rent
Allowance pr Rent
reimbursement, Leave Travel Concession, Children Education, Free
'•
.
or Subs
//
idized Food,
etc.

(D 6) Direct. Op~rational Expense~ : Direct _Gperational Expe~

se~ include all th~se
expensos which are incur~ed for provI~ing ~ervIce5. ta the guest~ hke
linen, ~ry cleaning,
table ware, kitchen utensil~. fuel, st~tIQnery, ,power, etc. -But this does
not include food
cost (variable cost~. and direct labour.c,osl.,,i .. ,i, ·
I
.
I I' >

(D 7) Music and Entertainment : This includes salary and

perks (conveyance, food,
insurance,· etc) paid ,9 JIJJµ,sjcj~n,stlf§rJtJ~fl.ip fqr !tb~ ~qtJlpments,
1
m·oney spend on the
booking agent's fees or commission, dn,oney paid for procuring.
films, records, discs,
etc . or ~oyalty paid to companies for giving permission to
play music in the restaurant
or bar.

(226}
I

UNIF ORM SYS T EM OF ACC OUN TANC

J
Y
(D 8) Marketing Expenses: Marketing expenses include selli
ng, advertising (hoarding,
print and electronic advertisement), fees
and commissions, salary paid to marketi
staff, donations, good will type expenditure ng
s, royalties , fees paid to franchisors, mon
spend on research and development, etc. ey

/ (D 9) Energy Expenses : It includes elec

tricity, heating expenses, water,charges,
and refrigeration supplies, waste remova ice
7 l, etc.
7 (D 10) Administrative and General Expens
es : The operational expenses like office
7' expenses, stationery used in office , postage, telephone, travellin
g expenses (travelling
not undertaken for the promotion of busines
t7 s) , insurance, etc.
7 (D 11) Repairs and Maintenance : This
includes repair and maintenance of build
equipment like repair and white wash./ pain ing,
rJ ting of building, repair of furniture and fixtu
.repair of kitchen equ ipm ents , etc. The mon re ,
ey spend 'on repair should neit her increas
the production, nor imp rove the quality e
of product nor increase the life of ass
substantially as this kind of expenditure is et
considered as capital expenditure and is
debited to repairs and..rr{aintenance acco not
. r~-;-;·:.~~
unt.

(D 12) Rent and Rates. : This includes

rent and occupation costs , real estate taxe
property tax, building and machine ry/ equ s,
ipments insurance, etc. Most of these exp
are fixed in natu re u_nless they are linke ense
d with sale e.g. the re nt can be a cert
percentage of saie and will vary depend ain
ing upon the sale.

(D 13) Other Expenses : The expenses whic

h are not covered under any of the above
mer tion ed heads am listed under the head other expenses.

(D 14) Depreciation: In India depreciat!on

is always s~own separqtely a$ it is a statutory
requ irement to ..show profit before depreci
ation and interest. The Cash Earning Per
Sha reincludes the net profit plus depreci
ation . - .

(D 15) Interest : It is very important for

investor and general public to know th e
equity ratio of a company. The interest debt
pai~ .on the borrowed money is to be sho
separately so the investor can know the wn
financial health of the company.

(D 16) lnc.ome Tax : The corp orat e are requ

ired to pay incom e tax on every penny they
earn and are shown sep arat ely in the boo
ks.

NOTE:
Cost of Goods Sold: Th e cost of raw ma teria
l of food and bev erages sold is term ed
as cos t of goo ds sold . It is al so call ed as Vari able Cost and
is deducted from the total
(227 )
 HOTEL ACCOUNT, FINANCIAL AND f & B MANAGEMENT

sale to know the Gross _Profit; some ·esta~lishments te~m it as ~et Sale as well. To
know the cost of saleJhe _total of raw material consumed 1s .totaled" the other way to ·find
out the ·co~t of goods sold is brought forward ~f food and beverage progucts add \

requisition from stores and deduct the -balance m ~and at ,-the enq of the day., The
balance in hand becomes the brought forward on the following day. rTo know in detail
about costo.f go<;>ds sold; please refer to 'D' part of this book) . -
'
service Charges: Some hotels charge service charge in lieu of customary payment of
tips: The service charge so charged is distrib.uted to the st_aff and is not shown as sale.
• I •

There is no·hard and fast rule that each group of comp~ny or association has to follow ·
the' above _mentioned sch~du'le'. . The as'sociation I group may recommend another
s~h_eqlJle depending upop ·treir ne~ps.
: ' : ,,

Th~ t~,cor11~ §~"tem_ent i~_the detaii of revenues and expenses. The income sta,ement .
provided t<f s;uppJieJl debtors, creditors, bankers, etc is different as compare to the
income st.~tekm~n~J>r~paredrfor the man~gement. The,income statement provided to
management ls much 'foore in detail as compare to the income statement presented to
suppliers, etc. Usually the income statement provided to management contains last
three years .
with
revenues and expenses. The gross revenue information detail along-.
- ' . ~'
-- - .,.,

pef'share reven~e like, EPS and CEPS (Earning Per Share, Cash Earning Per Share),
pr(?_fi_t, .etc. is enclosed for the perusal of management and investors. .

INCOME STATEMENT: _
The su_m.mary·of al!!~~coun,ts dealing with transactions relating to revenue and expenses
is_. termed as profit and los~ acc.oqnt. The account is termed as stat.ement wherein
information is accumulated ·relating to the item or group of items giving information
.regarding expenses and revenue.

REASONS FOR MAKING STATEMENT 9F INCOME :

1. Debt Servicing Cost : Income statement helps company to know that
i.y~~t~~f)h~Y ~r~ in a positi~Q to recover th~ .interest .paid on borrowings
from bc:J.Q1R; ·tnar~et (bot~ secqred and unsecured loans) .or not.
2. f
Retur~ ,(~f) nv,~i(!1erjt ; l_t is ~~ry)mpo'rtant to kn~w whether the·re_asonaple
.return 1s·be1ng paid to the investors, share holders both equity and preference
,R~,n?t·, ~~e cp,ri:wa~y v.:~widf31S~ like to,m~intain different type~ of ~eserves
1iKe<[6t,iera'I rei erve, capital res~r.ve,\~peGial reserv~, etc. . ·
3. . JncoMe :To know Income, Company is making from routine, normal day-to-
day operations.
4. Success or Fallur:e of Mansg,ement : Whether company J.s m~king
reasonable returns from the capital deployed by the·m. If the returns are
(228)
 '
'-,
) UN IFORM SYSTE M OF ACCOU NTANC Y

j '-' better then the competitors then the policies of the management

t
are
j ~ considered as successful.

@5. ·
Popular : Whether the goods or I and services offered by the company
popular in the market or not. It the ·sale is improving or is better then
•.
are
the
, competitors then it is considered that th~ services/ goods offered are p9pula
~.

~
Price Sensitivity : The impact on the sale by increasing or reducing
the
price is known from income statement and this helps management in decidi
ng
:: whether to increase or reduce the rate and by what percentage.
Profit Centered or Volume Centered : The price sensitivity helps
management in deciding that the policy of the management should be
price
centered or volume centered. The high volume of sale will give a
low,er
percentage of profit as compare to low volume of sale. The volume of
sale
will increase if the price of the product is reduced . At times by reducing
the
price the volume of sale is increased considerably and the manageme
nt
makes more profit even if the percentage profit on sale is lower.

DETAILED STUDY OF INCOME STATEMENT

REVENUE EARNING DEPARTMENTS

1. Lettable rooms
2. Food and Beverage
3. Swimming Pool and Health Club
4. Floweriest and Beauty Parlour
5. Telephone and Secretariat Services
6. Other Operated Departments
7. Rental and Lease Income
.
UNDISTRIBUTED DEPARTMENT EXPENSES
1. Operation Expenses
2. Administrative and General Expenses
3. Salary and Wages
4. Sales and Marketing Expenses
5. Fuel and Energy Cost

FIXED EXPENSES
1. Rent arid Lease
2. Interest
3. Deprec_iation and amortigation
4. Insurance
5. License Fee

(229)
 HOTEL ACCOUNT, FINANCIAL AND F & B MANAGEMENT

NET INCOME= TOTAL .REVENUE - UNDISTRIBUTED DEPARTMENT EXPENSES

FIXED EXPENSES

STATEMENT OF INCOME

REVENUE EARNING DEPARTMENTS

Schedule Net Cost of Related Other Income

' No Revenue Sale Expenses ~penses or Loss
Lettable rooms 1
F9()d and Beverage 2
Swimming Pool and Health Club 3
Flow,eriest and Beauty P~rlour 4
Tel_
~pnone.and Secretariat Services 5 '
Other Qper~1ed Departments 6
Rental and 'lease Income 7

UNDISTRIBUT:ED '[?EPARTMENT
EXPENSES
Opocation Expenses
-
Administrative and General E_
xpenses
8
9
Salary and Wages 10
Sales and Marketing Expenses 11
Fuel and Energy Cost 12

FIXED EXPENSES -
Rent and Lease 13
Interest 14
Depreciation and amortigation 15

I
'
Insurance
License Fee
16
17

I NOTE: 1. There is no hard and fast rule that in India the schedules recommended by
I American Hotel & Motel Association -of the United States and Canada ~re to b!3 adopted
by the hotels I restaurants. The schedules can be suitably modified k~eping in view the

I
industries requirements and needs.
I

2. In case the above mentioned 17 schedules are accepted by a group of hotels /

restaurants then the same schedules should be followed by all group members even if
any one or more of the above mentioned revenue earning departments or expense's
(230)

I ,

LI
 UNIFORM SYSTEM OF ACCOUNTANCY

heads are maintained or not. e.g. if hotel does not pay any rent or lease money then
schedule 13 will be shown as blank and interest will be shown under the schedule 14
and so on.

Illustration 1
From the following inform_ation prepare the income statement wi!,h sc~e.
/ -- Rs.
Food ;,ale; 40,000 -r.
Beverage Sal 3Qj100 -t-
- Cost of Sale: FQO
~ . " .
12,000
t
1-

Beverag 6,000 8. -
rSalary and WEges 2,000 it.
~mployee's Benefits 500 5
1 Direct Operational Expenses 700 G
tv1usic and Entertainment 400 l
Energy Expenses 1,000 9
General Expenses 200 1°
Repair & Maintenance 100 1 1
Depreciation 300 i Lr
Interest 500 15"
Income Tax 500 , 6
,Other Income 3,000 .3

Solution:
SUMMARY STATEMENT OF INCOME WITH SCHEDULE

Revenue . Schedule Sale Cost of Sale , Income

No_.
Food Sale D1 f 40,000 12,000 28,000
Beverage Sale D2
03
t 30,000 6,000 24,000
Other Income 3,000
Gross Profit 55,000
DETAILS
Salary and Wages 04 2,000
Employee's Benefits 05 500
Direct Operational Expenses 06 700
MUsic and Entertainment , 07 400
Marketing Expenses 08 · -
·Energy Expenses D9 1,000
General Administrative Expenses D10 200

(231 )
 iiiiiiiil

HOTEL ACCOUNT. FIN

ANCIAL AND F & B MA
NAGEMENT
Repair and Maintenance '
011 100
'

Rent and Rafes I

Ot he r Ex pe ns es
01 2 --
Inc om e before Depreciat
01 3 -- - 4,900
ion
DepreciaJig.n .. 50;,100
01 4 ' ~ -300
..
Inc om e before Interest
Interest 49,800
01 5
Ne t Income before Incom - -500 ·
e Tax
Income Tax D H, 49~30'Cf
Ne t Income after Inc om - 500
e Tax
48,800
NOTE : Schedules follow i

ed are recommended by
AHMA. \

Illustration 2
From the following infor
mation, prepare the statem
th e mo nt h ended on 31 ent of income for XYZ,res
st December, 2006 taurant f_or
\

Sale Food \·
1,50,000 l
Beverage ( ,
50,000 --1:,,,r

Co st of sale : 35 % of Fo
od Sale · r -· \
20% of ,~average Sale 0

Salaries and Wages

25,000 L\..

Employee's Be_nefits ' . 8,000 s

Direct-Operating -Ex pe ns
es 18,000 G
Music an_d Entertpinmen
t 4,000 1
Marketing
2,500 ~
Energy and Utility
5,000 :J,

General Expenses
15,000 \ '()
Rent
6,?00 \ \:\ ,
Interest
2,500 ,(
pepreciation
, , I
·5,poo \l\-
Inc om e Tax
2,000 \G

(232)
 UNIFORM SYSTEM OF ACCO UNTANCY

Solution:
Statement of Income with Schedule
Revenue Schedule No. Details Amount
Rs. p Rs. p
Food Sale D1 + 1,50,000., -
.,,
Less Cost of Food Sale {35%)
Beverage Sale D2
-
+-
52 ,500 ,
50,000 r·
-
-
97,500

~
---
.,.
Less Cost of Beverage Sale (20%) - 10,000 ,. - 40 ,000
Gross Profit 1,37,500 -
.-

Less Controllable ExQenses :

Salary and Wages 04 25.000 .-- -
Employee's Benefits 05 8,000 / -
-
Direct Operating Expenses D6 18,000 ~ -
Music and Entertainment 07 4,000, -
Marketing ·Expenses 08 2,500 ,, -
Energy & Utility 09 5,000" -
General Expenses D 10 i 5,000 ., -
Rent 0 12 6,700 · - - 84,200 -
Pr~n 53 ,300 -
Depreciation D 14 -- 6,000 -
..:---
Profit before Interest 47 ,300 -

i
Interest
~
D 15
-- - 2,590 . -
N e ~ e Tax 44 ,800 -
Income Tax D16 - 2,000 -
~
'
Net P r ~ Income Tax 42 ,800 -

NOTE:
1. The schedules recommended by .A_:_~.M.A. have been followed .
2. Schedule D 3, D 11 and D 13 have been omitted as there is no income under the
head other income a~no expe~~diture urrder the head Repairs & Maintenance and
Other Expenses.

SCH~DULES FOR HOTELS

The ~fli~ rican Hot~I & Mot~I Association (A.H.M.f\ .) has recommended 1..6 schedules
for hpfel,sI. The following impor tant schedules are accepted by a group of hotels to have
I I
1
•

uniformity in the accounting system. These schedules are as follows .

B1 ROOM SALE
(233)
I B2
HOTEL ACCOUNT, FINANCIAL ANO

FOOD ANO BEVERAGE SALE

F & B MANAGEMENT

83 LIQUEUR SALE
84 TELEPHONE SALE
85 OTHER SALE
B6 SALARY AND WAGES
87 EMPLOYEE'S BENEFITS
88 DIRECT OPERATIONAL EXPENSES
89 MUSIC AND ENTERTAINMENT
810 MARKETING EXPENSES
811 ENERGY EXPENSES
812 ADMINISTRATIVE GENERAL EXPENS
813 ES
REPAIR.AND MAINTENANCE
814 RENT ANO RATES
815 OTHER ~XPENSES
816 DEPRECIATION
B17 INTEREST ·
818 INCOME TAX

Illustration 3
Pre par e an Inc om e Sta tem ent in
accordance with the forma~ .prescribe
Sys tem of Ac_cou nts for ABC Hotel d in Uniform
from the information given below.
Particulars Amount Particulars Amount
Rs. p
Sales Rs. p
Other Exg_enses
Room
Food ·& Beverage
j 20,00,000 - Rooms 75,000 -
10,00,qoo - Food &Beverage
Te)ephon,~
Othe:r Operated Depts.
-
( 3,50,000
2,00,000
- Telephone
- Other Operated Depts.
50,000 -
5,000 -
Rentals &·Other Income · 1,50,000 10,0 00 -
- Administrative &General
Cost of Sales 20,000 -
Marketing
Food & Beverage C 15,oo(J' ) .

~{
2,80,000 - Maintenance
Telephone 90,000 20,000 .
- Energy Cost
Other Operated Depts. 1,00,000 .
40,000 - Fixed Charges
Pa_y_roll & Related Exp_enses R'~nt .
Room 1,00,000 30,000 -
- Property Taxes
Food & Beverage 10,000 -
90,000 - Insurance
Telephone I

✓ otti'er Oper~ted Depts.

75,000 - Depreci~ti~~ -
\_..
- 35,0., 00
30 l000
.
.
5,000 - Profit on Sale of Assets
•Administrative 1&· Gerteral u f :•ii !',.··5o;oo 1,00,00~ .
o :.,1,
1
hco tne
Mark-eting r/1 . I It
,C Ta~
_,
60,000 -
110·1000
Maintenaoce
' , I,/,
-
I

20,000 -
(234 )
.
I

~ UNIFORM SYSTEM OF ACCOUNTANCY

Solution:
~
Statement of Income
~
,
Revenue
~ Details Amount
Rs. , p Rs. p
~ Sales
~ Room 20,00,000 - -
~ ~ood & Beverage
Telephone
10,00,000 - -
3,50,000 - -
~ Other Operated Depts. 2,00,000 - 35;50,000 -
~ Less Cost of Sales
Food & Beverage ·
~ T~lephone
2,80,000 - -.
90,000 - -
~ Other Operated Depts. 40,000 - 4,10,000 -
Profit
~ \ Add Rentals _& other Income
31,40,000,,- -
1,so,000 ~ -
~ Gross Profit 32',90,000 , , -
Less Payroll & Related Expenses:
Room
Food & Beverage 1,00,000 - -
Telephone 90,000 - -
Other Operated Depts. 75,000 - -
Administrative & General 5,000 - -
Marketing 50,000 - -
Maintenance l0,000 - -
Profit before Other Expense~ 20,000 - 3,50,000 -
Less Other Expenses 29;40 000
t , .
Room
Food & Beverage 75,000 - -
Telephone 50,000 - -
Other Operated Depts. 5,000 - -
Administrative & General 10,000 - -
Maintenance 20,000 - -
I Energy' Cost 20,000
1,00,000
-
- 2,80,000
-
-
16,60,000 . -
Less Fixed Charg~s
Rent 30,000 , - -
Property Taxes 10,000 - -
6i Insurance , 35,QQ0 r - 75,000 -
V Profit before Depreciation & Income Tax 15,85,000 ., -
(235)
 HOTEL ACCOUNT. FINANCIAL AND F & B MANAGEMENT

Add Profit on Sale of Asset 1,00,000 .

16,85,000 .
Less Depreciation 30,000 .
Net Profit before Income Tax 16,55,000 - \

Less Income Tax 60,000 -

Net Profit after Income Tax 15,95,000 -

NOTE: In case Capital Reserve .account is ·opened in the ·liabilities side of balance
sheet than profit on sale of as~ets is credited to Capital Reserve Account.

BALANCE SHEET - UNIFORM SYSTEM OF ACCOUNTS

The Uniform ~stem of accounts for hotels ·/ restaurants contains a re~ommended

balance sheet format.. A format for balance sheet under Uniform System is as follows:

BALANCE SHEET OF M/S XYZ AS ON 31 ST DEC.EMBER, 2006

PARTICULARS AMOUNT
Rs. p

ASSETS:
Current Assets :
Cash in Hand
Cash at Bank
-
Sundry Debtors
Less B~~pebt.s
-c,~si~ij;~ock
Bilis Receivab1es
Advance Salaries, Expenses (Prepaid salary I expenses)

Fixed Assets :
Furniture and Fi~ure
Less Depreci~tign
Machinery, Kitc~en, H.K Equipments
Les~ Q~preci~tiqn
Land
, j! I
•1
a~nd1, ~f uilping
Less ·Depreciation
I •, :;(J(, , ,.1.
t;Je(erred Reven,ue Efp'-~8, :
Re,;ioyijtion · , ,,
Advertisement
,. ,
and Marketing

(236)
 UNIFORM SYSTEM OF ACCOUNTANCY

Pre-operating Expenses

Investment :
Fixed Deposit$
Debentures
Shares

Non Tangible and Other Assets :

Goodwill
Patent
Security Paid for Gas, etc.
Cost of Bar License

Total Assets

LIABILITIES AND CAPITAL

CurrenH.Jabilities :
Sundry' Creditors ·
. Bills 'Payable •
Advance Received for rooms / parties
Unpaid Expenses, Rent, Salary, etc. ·
Short Term Loan
Dividend Payable

· Long Term l'iabilities :

Long Term Loans
Debentures-

Reserves and Surplus :

General Reserve
Capital Reser~e
Spedal Reserve
·,
Capital:
Equity & Preference Shares
Authorised Capital
Issued Capital
Sub~~ribed Capital

1 Total Liabilities
,·
(237)
 r

HOTEL ACCOUNT, FINANCIAL AND F & B MANAGEMENT

The Balance Sheet also known as 'The Statement o! Financial Position', contains the
assets, liabilities and net worth of_a hotel I company at the end of accounting period or
at any given point of time (generally end of the years, half years, quarterly or. monthly).
If a balance sheet is prepared one day after the previous balance sheet than it will give
a ~lightly different picture about assets, liabilities and net worth.

The financial information is useful for different reasons. The following are the important
reasons for preparing the Balance Sheet.

1. One can- know the current assets ·like Cash in Hand, Cash at Bank, Stock,
Bills Receivable, etc. and compare them with the current lia~i!i_t}es like Sundry
Creditors, Bills Payable, Short Term Loans, Outstandjr,g Paym~nt~,.~Jc. One
can see whether hotel is able to pay the current liabilitfos or not, or if there is
I
I
liquid cruncn. · . . , ,·._
r , .
(> . 2. Most of the assets of the hotels are of fixed in nature. The balance sheet
i
explains about all these assets. __
3. Lorg Term Loans of both secured and unsecured nature .i~ li~Je9 on the
liabilities side ot bala~ce sheet. Higher the debt - equity ratio, mor~ int~rest
burden the hotel has ·to bear and it affects adversely on th~ profit of.the ·
hotel.
4. Different types of reserves show that whether earning is retained by the
hotel for future growth . .The capitai reserve and specjal reserve are the
indications for the hotels financial stability and capacity to pay. for secured
and unsecured loans.
5. One c~n see whether all authorised capital of hotel _ ha~ b~en Jss4~9 and
subscribed .or not and whether equity capital or . preference c~pital is
authorised, -issued and subscribed and if both types of cap.ital are ·i$s,ued
then what is .the ratio and what is the dividend to be paid fo'r preference
shares and if any other conditions are attached to the preference shares.

The balanc~. sheet (Acco~nt Form) has bee~ discussed in detail in earlier pa~t of this
~oo~ (_Part A). 1The st~dents_may _note t~a_t in North America the left side of balance
~he~t 1,s _cal_l?? ~ssets_ and ~1gh t side as Liabilities'. Where as, in India the left° side is
1
callee L1ab1ht1es and nght side Assets'. Balance Sheet (Rep t f ) · d' ·
this ¢hapter. ; . or orm is iscussed m

jl'itatlons of8a1~n~~ She~t :(91

Though balance s.heet 1slone of the most Im ort t . ·.
•
· ., : .
but s'till it has certain limitation. The follo!lngan intshtru,~e~ts ~f financial ac~ountancy
are e 1m1tat1ons :

(238) ·
 UNIFORM SYSTEM OF ACCOUNTANCY

1. It is based on transactions recorded in accordance with GAAP (Generally

, Accepted Accounting Principles). The land and building is recorded in the
balan_ ce sheet at cost price, the price of building ·is depreciated every year
and the depreciated value o( building like other .assets is recorded. : The
present value of the land might be rpuch more t~en that of book value of
land (cost price of land) but this appreciated value of land can not be shown
in the balance sheet so it does not give the reaL value of assets.
The Rupee is depreciati_ ng regularly. The imported equipment,purchased
three years ago might have more value in terms of Indian Rupees but this
increased value can not be shown in balance sheet. G

These two reasons can be corrected by putting a foot note just belo~ the balance
~eet. The three major Indian Hotel Chains viz East India Hotel (E.I.H. - Oberoi),
Indian Hotels (Taj Hotels), ITC Hotels (Welcome Group of Hotels) have much more
actual value then shown in the balance sheet because the properties purchased many
years ago have much more value then the book value shown in the balanc~ sheets.
The goodwill is shown in the books only when a price is paid for a·cquiring the goodwill.
The three major lnqian hotel chains have acquired goodwill with their own efforts and
~
performance so they are not showing any goodwill in the book. Any buyer who is
~ interested in buying these equities (shares) wants to know the real value of assets and

~-
~

_.,, &
goodwill before taking ·a finai -decision.

CONTENTS c°FTHE BALANCE SHEET:

ASSETS:
The' Assets of a hotel can be divided into the following parts:
r
t-c;

,, •
,.
I)
1. Current Assets
2. Fixed Assets
--. - 3. Deferred Revenue Expenses
I

. ~

;..___,
~
i'
4. Investments
5. Non Tangible and Other Assets.
-1
I
I

•
~

,g
•• 1. Current Asset : Currents assets are those assets which can be converted to
cash at a short time of say six months to one year. Current assets are listed
in the order of liquidity. These are:
I
j
I
I

II!
'
.j
•• a) Cash: Cash means total cash in hand at Front Office, Restaurant, Bar, Health
Club, Swimming Pool, Cashier, Pet!y Cashier including imprest money
sanctioned to all cashiers.
I
I
~ b) Bank :Cash balance with all the banks along with the cheques, drafts deposited
~ but not collected as yet and cash being deposited in the bank. From this total,
e, •
,,... the total amount of cheques issued but not presented as yet for payment is to
be deducted.

.~
(239)
~
 HOTEL ACCOUNT. FINANCIAL ANO F & B MANA
GEMENT

c) Sudndhry Debtorst :dThey at re all !hose dp~rsons to whom

credit has been extended
an t e accoun epar n:ient 1s sen ing them bills for
· II · h paym ent Th ·
de btors are usua y t ose people •who have staye · • ese sundry
d in the hotel and sig d
t~e time of check out or paid throu9h__cred_it _cards. In
c~se .the hotel is:~ th~
view that any part of these debtors might not pay due ·to'an
y reason then from
these debtors expected bad debts are deducted and the
net amount is written
in the amount column against sundry debtors. ·
d) Closing Stock : Closing stock means the stock of all kitch
ens and restaurants
material whether kept in kitchens / restaurants or. store
is recorded in the
tlosi ng stock. ·
e) Bills Receivable: In case ·bills or promissory notes are
issued to any person
then these are also recorded in the current as~ets.
f) Advan~e Salaries and OtherExpenses : Sometimes
hotel pay~ advance salary
to employees for some reason. The rent, insurance
I premium, comrt1ission,
I

r etc. might have been paid _in advance without being due
then this i$,shown- as
\' ,
current assets and is adjusted as anq ":'hen ·it becomes
due.
2. -Fixed-Assets : Fixed assets are those tangible assets,
which are beneficial to
hotel for m_ ore then one year and it must have a substantial .val ue.
Some
hotels may not consider any assets of less then Rs. 5,00
0 as as~ets even if it-
h~s value for more then one year .e.g. buckets bo~ght for
hotel may have more
then one year life but are still not considered as assets
becau·se of their low
monetary value. Each fixed asset, may be with the
exception of _l_ a~d.
depreciates due to wear ahd tear as the time passes. So
the depreciation is
charged to each fixed asset and the depreciated value of
the asset is shown in
the balance sheet under the head fixed assets. The follow
ing are the fix~d
assets and are listed in the·order of liquidity.
· · ·
a) Furniture and Fixture : The hotels have large asse
ts in t_~e form of furniture
and fixture. Each bed room, bath room, restaurant, bar,
store,.$, lobby, etc.
have a lot of furniture and fixture fittings. . .
b} _Machinery.: It includes Kitchen, Ba~, A~$t_a~~~nt, Hous
e keeping .~quipments.
It also includes cutlery, laundry equipment, centraliz
ed he.ating and air -
,. -~Q~?i,-1!9.9i.'J9, ~tc. .
c) ·Jc!'Jd -~_.- f!pi!dJng : If the building is purchased then
it must also_ include the
brokerage charges, registration fee an~ the value of
the land and
~b,p,~Jq:;~Jt PJJpyvn, - ~~p,~~,;itely,1.ifl the books. But "if·the building is consbuild ing
t~w;v1hnJW·Jir1t,m~cJ1~,rJJa,.l, (!,~t;>pur, C,On$.VJtafilCY, ~lrJpervisor,y, ,architeGt c0st tructshould
ed

I be debited to building account. If the old bui.lding is purchase

d and is.renovated
)' --~~{~t~1~,!i XJlf,l,9, 1t,~,e,no~~,Ifl~-~n ,r.~qqy~tion cost should ~lso be .aaded ,to
, ~9P,p~nt.
3. Deferred Revenue Expenses : Sometimes hotel make
building

s majo r revenue nature

(240)
 U~IFORM SYSTEM OF ACCOUNTANCY

expenditure and it gives a utility to the hotel for more then one year and du~ to
limited profit. it is not written off in -the financial year when it is iAcurred. Th~;~
is no hard-and fast rule that what_types of expenditure should be treated a~
deferred revenue expe-nditure. The following are the most commo,~ deferred(
revenue expenditures :
) a) Major Renovation : A hotel is usually renovated after a f~w years to stay in the
7
business and to make it more comfortable to guests. A large amount of money
is spending on the renovation of the ·hotel and hate! doe~ not require any
major expenditur,e on renovation for next couple of years. The accountant
"J show a part of th~' renovation expenditure in current financial year's profit &
loss account and the balance is shown as an asset under the head deferred
revenue expenditure and is written off in the next three to _fou r, years.
b) Advertisement !·Whenever a-new hotel·or a new restaurant is oper:,ed large a
amount is spending on its publicity so that awareness can be cr·eated in the
market about the new property. Usually this expenditure is of large amount
and this advertisement gives benefit to hotel for many years to come and
) hence the expenditure is shown as deferred revenue _expenditure.
c) Pre-Opening Expenses: Sometimes hotels make large pre-opening expenses
· in the form of advertisement, soft opening, etc. and these expenses are also
shown as deferred revenue expenses in balance sheet.

Not~: 1, Pre-opening expenses can be capitalised.

2. Major renovation expenses can be capitalised, if hotel increases the tariff
after renovation.
)
4. Investment: In case hotel has surplus cash and does not have any expansion
plan for the time being, decides to invest it in the form of fixed deposits,
debentures or buy shares of other public limited company to earn some revenue
for the hotel. These investments are bought in the name of the company and
are shown in the balance sheet. These different investments are discussed in
detail in later part of this book.

5. Non Tangible & Other Assets : .Non tangible are those assets which can
neither be seen nor felt as they have no shape but have value like Goodwill.
Patent, etc. Other ·assets are security paid for water connection , Gas
cdnnection, Powet connection ·or Bar license or Hotel license fee . When
· goodwill or patent is'boughtifrom another person then only i"t is shown beet.use
., .• ,:onefmay pay s·ome m·oney ,towards goodwill, patent fee, etc. But if the goodwill,
· patent is earned with own efforts of business then it is not shown in the
books. It may have a value in the eye of a buyer but it is not shown in the
balance sheet.
(241)
 HOTEL ACCOUNT, FINANCIAL ANO F & B MANAGEMENT ''
LIABILITIES : \
The amount which is due to others on the date cf writing balance sheet is listed under \
the head liabilities. The total of assets side and :liabilities side is always the same. In
other words: ·
Assets = Liabilities + Capital
or Capital = Assets - Liabilities

The liabilities ·can be divided into four parts :

1. Current Liabilities: Current liabilities are -those liabilities which are to be paid
within a year. Thes·e are:
a) Sundry Creditors : The hotel buys stock and equipment from suppliers and
u~ually does not make cash payrJlent. These suppliers ·are paid within one
month to six months dependiog upon the terms arid conditions and hotel's
policy.
b) Bills Payable: In case a bil( was accepted from someone then the value _of the
bill is settled in 30 days and is shown as a cu.rrent liability.
c) Advc1.nce Received: At the time of room ·reservation or part booking an advance
is received for confirming the booking and ·ts adjusted aQ_ainst the bill as and
when· it is raised. Till the amount is adjus-ted, this advanc_ e is shown as a
liability against advance received. . .
d) 'unpaid Expenses: In ·case -some expenses like rent, interest, commission,
salary, etc. is due but not paid as yet is shown as a liability in the balance
sheet. This liability may be paid almost immediately.
e) Short Term Loans.: Some times hotel takes short term loans to meet the
d~mands of recurring expenses. Usually·these loans attract high rate of interest
·to
a~d ihave ,be paid within a year.
l) ·/ [Jivid~nd Payable : The dividend d~clared but not _paid due to unavoidable
'reasons -.is :listed as a liability in the balance sheet.

2. Long Term Liabiiitie s : ·1hese are those _liabilities which need not be paio
w\~hJ_~ ~n~ year br )n other words it has to be paid after two to five years.
· . T~.,~,:r~pc\_Os;are ·taken for capital expenditure. The hotel mu.st .keep this loan
·am9yn~,~~:4?w as.possible to keep the interest burde·n within limits. The long
. '.' , I jj~_ rrJ ft~9!1itip,i ~re: ' {, .
,;_ a) 30L~1g·c~9tdtlfr/a,ns :These.fo~,;s ·are tak~n from banks, fin~ncial institutions or
'J• ,' ,T' ' 1~~!U-e.~~l~c,.t~9.:.,r~r
1 1
~0 1_Pe. r~p~ld at.tar ,two to five years, or may _be more.
,b) · D,'1b8fll!Jrf!~ ?(S~ma\lmes thot~J .issue ·. de.bentures .to -oollect money from the
11

' .. _· ~arket fc;,r 8 . long iterm. ifhe ~ebentures are to be paid back in two to four
· installments·,n threeito ten years and more. ,.

(242)
 UNIFO RM SYST EM OF ACCOUNTANCY

all its profit to share

3. Reserves & Surplus : The hotel does not distribute
ed as surplus. Th-e hotel may also earn
bolders but some profit_ of it is retain _
or may create special
some money on selling assets or sell shares at premium
may be the reason, the
kind of reserve for some specific purposes. Whatever
the development and
reserve is a cash with the hotel and can be used for
expansion. Broadly reserves are of three types:
rf3d to reserve account.
a) General Reserve : The undistributed profit is•transfer
on subsequent years ·
This reserve is maintained so that hotel can pay dividend
for the expansion of
even if there is not sufficient profit or this reserve is used
business.
paying dividend to share
b) Capital Reserve: This reserve cannot be used for
above the book value
holders and is created on selling the assets at over and
acquiring asset~ or for
or ~y selling shares at premium. This can be used for
expansion of business.
certain liab~lities which
c) Special Reserve : Th_is reserve is created tq pay back
e reserves are created
will be due' for payment after one to three years. Thes
from the profit of the hotel operations. ·
tal and these are Equity
· 4. Capital : The hotels have two types of Share Capi
,,. Share Capital and Preference Share Capital.
: Equity shares are the
a) Equity Share Capital & Preference Share Capital
share holders get profit
shares which are issued to th~ share holders. These
rence share holders
only if there is surplus earning from the business; The prefe
get a minimum of certain fixed dividend _ even·if there is no earning.

The other types of Capital are :

al which a hotel can issue
i) Authorised Share Capital: It is that amountof capit
al it is authorised to
to the public. The hotel may or may not issue all the capit
d capital then it has to
issue. In case the hotel wants-to increase the authorise
ion of share holders
obtain the approval of share holders and intimate the decis
to SEBI.
h is issued to the public
ii) Issued Share Capital: It is that amount of capital whic
may not issue all the
through prospectus. The Board of Director may or
authorised capital to the public for subscription.
may not be subscribed by
iii) Subscribed Capital : All the issued capital may or
the issued capital within
the public. But if public does not subscribe 90% of
to return the money to
the stipulated lime then Board of Directors are required
subscribers and no share can be allotted.

on .4
Illustrati of ABC Hotel for the year ending
Prepare a Balance Sheet (Report Form) In the books
on 31st December, 2006.
(243)
 HOTEL ACCOUNT, FINANClAL ANO F & B MANAGEMENT

TRIAL BALANCE
Debit .,
Credit
·Particulars Amount . Particulars . Amou:it
. Rs. · .P -Rs. : p
Cash in Hand , 40,000 - Capital .·3',44,70,000 -
Sundry Debtors 2,30,000 - Sundry Creditors 1,80;000 -
Land and Building 4,08;80,000 · - Bills Payable . 50,000 -
, :_M·a·cnin·ery -8,50,000 - Loan (Long Term) 58,000 -
·,t.aoc,dwill 80',00,000 - Debenture·s 95,09-,000 -
-Gutiery & Crockery 50,000 - Reserves 57,92,000 -
••• , , .1.J
• ,J, ,•·•;,. -·
I

' '
' I., •., ,I ;~,'~I/ /':' .

Sbiilticftf: .
I , .

· ,· :; 3id~ala'h'.de She·et of Mis ABC Hotel -for the year '.ending or 3\st·-Deq~rnber, 20Q6
. -=-: ·; (,'°-C ·:·}· ·. -· ,- 1 · ·. • · 'L:-,~· :-: ·. / ·. .

Particulars Details Amovnt

--- p p
., ' C
.., _
Rs. Rs.
I • •• • j • I
' •

CurrentAssets : ., -
:~ -Cash Hand
. • l ~!- . . ,. ;• .
~n- -- ~ ' .• . :-
40,000 - 1
,; --:1
~

i•'c.i ~~ij~f'gry.O~btors _
1
2,.30,-000 - ~,?0,000 -
/

..Fixe,ci Ass.ets .:
..-,·cuii•~w:~nd -
Crockery 50,000 -
Machi11ery
'.>
8,50,000 -
,: L~ng_,anp Building 4,08,80,000 - 4,.17,-80;000 : -
:
iWo'niT:~ri'g(t,ie?Assets : · -
0~0Cl&'iJ11i ,., 1
--1 ~1 'f • __ ._._-.... . . .
· · "
-
801001000 -
-T6fal As~e'ts ·s,oo,:so,ooo -
_; ·i;r~t"" ~~~ {
~:·, 'r- '._. '• ◄

Curre!7! U E?b!!ftic~ :
:{am~·P~Y~-~le · - - 50;000 .-
, -· 1isun.otf ¢tedJt~rs .1,eo;ooo -
Long Llab/1/tles :
,.- :. ,· td;rn,.'t ·•,, , . -·•1
term, ,,
2~0.000 -
58,000 -
I
"i I /
~ J, ,_,1 • _, j, • .,. ; .J, l '
I

··! 1·1tiv~def5@fltuie•
,,,,., ' ,.,. . si?,,:, .,
. '· ' ~ ,(
-
~5,00,000 , - ' 95,58,000
1 -
:,:R~et~i' ~f'!flf$~rplµs : I

~e~erv~s,, _
1 57,92,000 -
Capitar
Capi.tal 3.44}0,000 -
: ::fotai [/ablllties +'Capital ' 5, 00, 50 000 I -

(244)

I ..
 UNIFORM SYSTEM OF ACCOUNTANCY

Illustration 5

Prepare a Balance Sheet according to the format prescribed . in Uniform System of

Account for Hotels from the following trial balance in the books of XYZ Hotel as on 31st
December, 2006

TRIAL BALANCE

Particulars Amount Particulars Amount

Rs. p Rs. p
Cash in Hand ~ · 20,000 - Preference Shares 1,50,000 -
Cash at Bank -- 80,000 - Equity Shares 9,00,000 -
Closing .Stqck
.
-:;.".__•
35,000 - Accrued (=xpenses 15,000 -
Prepaid S~lary --- 5,000 - Debentures 70,000 -·
Crockery ., Cutlery· · 35,000 - General Reserve 80,000 -
Lmd & Building 5,00,000 - Capital Reserve 70,000 -
I Investments (Short Term) - 2,00,000 - Profit & Loss a/c 1,40,000 - -
\ Sundry Debtors - · 10,000 - Sundry Creditors 80,000 -
Kitchen Equipments 2,00,000 - Bills Payable · 20,ooq ·, '

Music & Sound System , 80~000 -

f

. Deferred Revenue Expenditures 40,0_00 -

Furniture & Fixture .1,00,000 -.
Shares·of RIL . 2,20,000 -
15,25,000 - 15,25,000

Solution:

Balance Sheet of Mis XYZ Hotel as on 31st December, 2006

I
r:ctrt;\.,ula rs Details l Amount
!

I
I
I

Rs. p Rs. Pl
Current Assets :
Cash in Hand 20,000 -
Cash at Bank 80 ,000 -
Closing Stock 35,000 -
Investment (Short Term) 2,00,000 , -
Sundry Debtors . 10,000 · -
I Prepaid Salary 5,000 - 3,50,000 I •
I
1
Fixed Assets : I
Crockery and Cutlery 35,000 . -
'i
(245)
 HOTEL ACCOUNT, FINANCIAL AND F & 8 MANAGEMENT

Kitchen Equipment ·; 2,00,000 -

-
Music & Sound System 80,000 , -
Furniture and Fixture 1,00,000 -
Land and Building 5,00,000 - 9, 15,000 -
Deferred Revenue Expenditure .. I 40,000 -
Investments (Long Term)
Shares of RIL 2,20,000 -
Total Assets 15,25,000 -

Current Liabilities
Accrued Expenses
/I , /
1
1s,ooo -
·Sundry Creditors 80,000 -
Bjlls Payable 20,000 - 1, 15,000 . :
-
Lon~ Term Liabilities
Debentures / 70,900 -
Re~erves and Surplus-
Gefleral Reser¥e 80,000
Add Profit ~1,40,000 ✓- 2,20,000 I -
Capital Reserve 1 70,000 - 2,90,000 -
Capit~/ -
Equity Shares 9,00,000 -
Preference Sh~res 1,50,000 / - .110,50,000 -

Total Liabilities + Capital 15,25,000 -

NOTE:
1. Undistributed profit is credited to general reserve instead of capital account as
mentioned earlier in th(s book · ,
2. Short term investme,nt-is showri in current assets.
1
<'

' ( \. '
IIIJ!itra1ion '6 · '· . ' . ·
l '{r0 m the following Trial Balance prepare statement of income with schedule and balance
sheet.

\ (246) ·

' \
.I t\
.I
UNIFORM SY~TEM OF ACCOUNTANCY
.,.
TRIAL BALANCE
J
~it
____.. OJ;
Particulars
Amount .
Credit =->
Cv
~

.I Particulars Amount
Rs. p
.I Cost of Sales: Food Rs . p
~
2,50,000 - Sale_: Food ~
~

. Beverage 68,000 -· 6,30,000 -

'-- - Beverage
r-8alary .arid Wages 2,81 ,000 -
2,45,000 -
'
)
'--- Employee's Benefits
....._

,...._
. . . QirecrOp~rational E~penses
40,000
45,000
-
-
Sundry Creditors
D~bentur_ es .
.Salary Payable
1,45,000
1,86,900
-
- :

) ~usic and Entertainment 6,000 -

2,000 - Income Tax Payable
1[', -Advertisement & Marketing 20,000
8,000 -
-
' 1
<..
E.n_ergy '.and Vtility .
dministrative Expenses
-r-,-Repair and Maintenance
28,000
29,000
-
-
Long Term Loan
Bills Payable
Fixed Deposits ·
-20,000
50,000 ·
2,80,000
-
-
-
·Mr,terest 13,000 - ·capital 2,47,000 . -
. 95,000 - General Reserve
.-income Tax 60,000 -
23,000 -
Cash in Hand
15,000 -
<Sundry Debtors Cu._,\'{
1,08,000 -
,Closing Stock
15,000 -
1'repaid Salary 12,000 -
1 Land
) 5,00,000 -
Building 60,000
)
-
Furniture & Equipment 2,50,000 -
Cutlery and Crockery 95,000 -
Total 19, 13,000 - Total 19, 13,000 -
1

Solution :
Statement of Income with Schedules
Revenue Schedule No. Details Amount
.f,.,· ' r(fJ'
Rs . p Rs. p
Food Sale D1 6,30,000 -
Less Cost of Food Sale
2,50,000 - 3,80,000 -
B~verage Sale D2 2,82,000 -
L~ss Cost of Beverage Sale 68,000 - 2, 13,000 -
Net Sale
5,93,000 -
Salary and Wages D4 2,45,000 -
I I
(247)
 HOTEL ACCOUNT, FINANCIAL ANO F & B MANAGEMENT

Employe~'s Benefits o·s 40,000 -

Oired··bperational Expenses 06 45,000 -
Music and Entertainment 07 2,000 -
· Aavertis.~ment & Marketing 08 -~9.000 ..
-
.Energy &·Utility 09 · 28,000 -
Administrative Expenses 010 29,000 -
Repair. and Maintenance 0 11 13,000 - -., 4~2_2,_000 ~-
l Profirbefore Oep. & Interest j,71,"Q00 -
lnteres_t 015 . 95;000 -
-,I .-

! Net Profit before I. T. 76;000 .;.

1 lncorne Tax ' D 16 '23,00Q.·. -
: N~t .Rrofit after Income Tax · 53,000 ·-
'; ... .. ~

Note :·Net Profit transferred to General Reserve.

Balance Sheet of Mis XYZ Hotel as on 31st December, 2006 .

Particulars Details Amount
Rs. p Rs. p
~

. Current Assets ·
15,000 -
.
Cash in Hand
; Sundry Debtors 1,08,000 -
Closing _ Stock 15,000 · -
. '
.prepaid Salary 12,000 - 1,50,000 -
' Fi~ed Assets
-cq(r~ty :&Crockery 95,000 -
f=u.rniture and Equipment 2,50,000 -
Building 60,000 -
·Land 5,00,000 - 9.05,000.. -
10,55 ,00 0 -
To.tal Assets
! -·
Current Liabilities
' • ( f'~ j ~ I

Salary Payable ·- 6,000 -

Sundry
1
Creditors ,, 1,45,000 -
- 1n8b~l tax PaY,able '
j • 8,000 -
f?ills Payable . i J'; .) '
50 000 - 2,09,000 -
__lc,/Jit(rm··~l~P1f1u~1( :~,:,. ~. ,
- ~ong Te.rrn Loan · 20,000 -
Fixed Deposit
2,80,000 -
Debentures
86,000 - 4,86,000 -
(248)
,
\,

"
~ UNIFORM SYSTEM OF ACCOUNTANCY
~
Reserves and Surplus
~ General Reserve
Add Net Profit 60,000 - i
\) 53,000
Capital - 1,13,000 -I
\; I
I Capital Account I
I 2,47,000 I
\J i - I
I

\) I Total ~iabilities + Capital i

10,55,000 , - I
i

.,
I

~ i

I)
)!!dstration 7
· _· . ·
I) From the following Trial Balance prepare statement of incom
e with schedule for the year
I) ended on 31st December. 2006 and balance sheet as
on that date. ·
V TRIAL BALANCE
I)
Particulars Amount Particulars
() . Amount "
Rs. p Rs. p
V ..
,---
~ Cash ,,,,- · 15,900 - Sundry Creditors 4,800 -
V jtll Swndry Debtors- - 1,200 - Bills Payable---- 9,000 -
V ~ Ren( _. / ·· 1,500 - Capital 10,000. -
0 ~ neral Expen~es / _ 10,000 - Food Sale / 30,000 - I
\

p ~o st of·Sales ( F & 8)/ 12,000 - Beverage Sale ,,,,

I

i
20 ,000 -\
\
D I Wages and Salaries/ 15,000 - Rent , / II
5,000

f
-
I I
rncome Tax ~ 5,000 - Laundry Income,,... 5,000 -I
Machiner/ :Y 10,000 - Telephone Income/ 4,000 -I
I Depreciatiqn -- · 1,000 - I
.\
+--f"mployee's Benefits~ 3,000 . - i
I
I
J1v1usic and Entertainment ,,,.- 2,000 -
\
I
.~ nerg ~ 3,000 - , I
I
f 9 Furnitu~e and Fixture /"' 8,200 -

87,800 - 87,800 -
I
I
I

(249)
 \
i.,
HOTEL ACCOUNT, FINANCIAL AND F & B MANA
GEMENT
Solution :
Statement of Income with Schedule \
DP½\ [v \y
Particulars Schedule No. Details Amount
Rs. p Rs. p
Sale : Food D1 30,000 -
Beverage 02 20,000 - 50,000 -
Less Cost of Sale (F & 8) 12,000 -
Net Food & Beverage Sale 38,000 -
Other Income 03
'Rent 5,000 -
Laundry 5,000 -
Telephone .• 4 000 -
·.
1~-.000 -
Total Sale - 52,000 -
Wages & Salary_ 04 15,000 -
Employee's Cenefits 05 .3,000 -
Music and Entertainment 07 2,000 -
Energy E.xpenses 09 3,000 -
Ge·neral E_xpenses D 10 10,000 -
:
Rent D 12 1,500 - 34,500 -
Profit before Depreciation 17,500 -
Depre~iation 014 1,000 -
Net Profit before Income Tax 16,500 -
Income Tax 016 5,000 -
Net rRrofit after Income Tax 11 ,500 -
-
- ,., .
C l~ .-,
~

-
.-~
t
, / \JI- •

Cc.12.fiCC S!ic~t as o, 1 3 i &i ueceml>er, 2006

Particulars Deta ils Amount

Rs . p Rs. p
Current Assets
Cash --15,900 -
Su,n_dry De~tors 1,200 - 17,100 -
Fixed Assets
I '

Fu_rniture and Fixture 8,200 -

Machinery : 10,000
I

, - 18,200 -
Total Assets
35,300 -
(250)

\
 UNIFORM SYSTEM OF ACCOUNTANCY

Current Liabilities
Sundry Creditors 4,800 -
Bills Payable 9,000 - 13,800 -
Reserves and Surplus
General Reserve --------- -
Add Net Profit 11,500 - 11,500 -
Capita/ ,
Capital Account
10,000 -
Total Liabilities+ Capital 35,300 -
'

NRote ·: Net ~refit has been transferred to General Reserve: Since there was ~o General
cserve so 1t has been created.

:r

QUESTIONS:
II

01. What do you understand from 'Uniform System of Accounts'. List in detail .!;

its advantages. What are the difficulties in implementing this system?

- ' '

02. What do you mean by Income Statement ? Explain in detail with examples.

03. What is a Balance Sheet ? Give its performa with contents.

04. Why Balance Sheet is prepared ? What are the different methods of preparing
balance sbeet ?

05. Explain the following :

Current Assets, Fixed Assets, Reserves & Surplus, Defe rred Revenu e
Expenditure, Equity & Preference Capital, Current Liabilities, Long Term Liability,
Tangible Assets ·and Non Tangible Assets.

06. What is the difference between General Reserve and Capital Reserve ? Explain
with examples .

07. What is the Statement is made ? How it is different from Recepits & Payments
Account.

08. repare an Income Statement in accordance with the format prescribed in

niform system of accounts for hotels front the information given hereunder :
(251)
 HOTEL ACCOUNT, FINANCIAL AND F & B MANAEMENT

/ Net Sales Rs. . P. ✓ Other ·expenses ~s. p

Room 25,00,000.00 Rooms : 1,0Q,.000.00 ·
Food ~ Beverage 12,50,000.00 Food & Beverage 90,000.00
Terephone : -3,00,000.00 ·· Telephone .. 5,000.00 · i
Other Operated Depts. 1,50,000.00 Other Operated··oepts. i 2,qo_Q.do
+ Rentals & Other Income 1,00,000.00 Administrative & General 50,000.00
J Cost of Sales Marketing 45,000~00
Food & Beverage <~,75,000.00 Property Operation &Maintenance 13?;0d6·.oo
l ~l~phone ~25,000 .00 Energy Cost ·1, 75,000.00
Other Operated Depts. 35,000.00 Fixed Charges
/ Pay_r_9II & Related Expenses .,,, Rent · 50;000:00
-Ro"om 1,75,000.00 .,, Property Taxes 20,000.00
--Food-- & Beverage · 1,40,000.00 .,, lnsuranc·e 45,000.000
T.~lephone . , 7,0,0Q~.00 Depr~_ c,iation · , 75,00Q.00 ./
-_ -·· . i : :·other ·o-perated o·epts. s,oo·o.oo
Administrative & General 55,000.00 Profit on Sale of Assets 1,00,000.00 v
Marketing _ 30,000.00
Pr?perty Operation &Maintenance ·35,000.00 Income Tax 75,000.00 ..,,,
..
09. Prepare a Balance St}_eet as on 31st December 1998 (Report Form) in the
books of GI.MCO ·trom the following balances of ledger :
: \ :.:.. _
--;; ·· ''°.: :,, ·.__ · · Rs>·· · P,
Cash in Hand - 40,000.00
_,· .--~,QAt~ 9,,aPl!~1 ..· 3,44,70,00.0.0,0
Sun·dry Creditors 6,80,000.00
Sundry Debto·rs 2;30,000.00
Bills Payable 50,000.00
: ,:· · rl:an,d,..8c8:uHding· 4,08,80,000.00
'I Bank's Loan 58,00,000.00
I
I Mach inery 8,50,000.00
_~~9q~_il_l 80,00,000.00
·De_b_~-~-~·l:J/ es 90,00,000.00
' .J ,, • ,_

I ,

?10. Pr~p~r~ a Food & Beverage o·epartmeht Income Statement from the
1~f0~m-~t.1q~ .Q,v~~ below .: -
I. Sales ., ,.r~ , -
· F,00 d Rs. P.
, r' · .,,
4,50,000,00 \
•'• •:~•~rVetr~~:;(< ,[,. IM 11 , , , _; ·. 1,80,,qo9,.0Q .l
P. urc hases of Raw Material 20,000.00 ;)
Fo.o.(t
' e~ve'rage, 1,35,000.00
I
65,000.00
(251-A)
 -
~ ---
,9
X,,
~ UNIF ORM SYSTEM OF ACCOUN
~
TANCY
JO
Wage Costs & Employee Benefit
s
-~ Salaries & Wages .
1,30,000.00 \
~
Provident Fund I Ht

Medical Expenses - 13,000 :00 S A/IIP\i

~ Other Expenses 15,000.00: S°' .IO I

H)

~ Kitchen Fuel
Electricity 40,000.00 ~
~ China, Glassware & Linen 30,000.00 ..5
~ Cleaning Exp.enses 12,000.Q0
. s;ooo.oo
Laundry & Dry Cleaning
~
1·· " ..
8,000.00

..,.,
l(J1

I- Licences l

~ ' Band & Mu sic 3,000.00

Other Op era ting Expenses 35,000.00
15,000.00
011 . From the following particulars
of Taj Continental H~tei, p~epare _an
tncome
~ Sta tem ent for the yea r ended on
31st December 1997, in ac;cordanc ;r
uni form system of accounts : e with the
Net Sal es ·
. Rs. P. Other Expenses
Roo ms Rs. P.
46,20,000.00 Rooms
Food & Bev era ge 1.,80,000.00 II
JA1
20,30,000.00 Food & Beverage
Tel eph one 1 ,90,000.00
1,25,000.00 Telephone
Minor Ope rate d Oepts. 3,000.00
1,30,000.00 Minor Operated Depts . . 3,300.00
Administrative & General 90,000.00
Cos t of Sal es Marketing
Food & Beverage 80,000.00
1,20,000.00 Property Operation & Maintenance 70,000.0
Telephone 0
20;000.00 Energy Cost 60,000.00 t.\)
Minor Operated Oepts. 25,000.00 Fixed Charges
~ Payroll & Related Expense s Rent 70 ,000 .00
Rooms 3,20,000.00 Property Taxes
~ Food & Bev erage 5,00,00,000 lnsurn nce
40,000.00
~5 ,000 .00
Telephone
~ Minor Operated Oepts .
30,000.00 Interest 80,000.00
6,000.00 Depreciation 1,20,000.00
~ Administrative & General 80,000.00 Income Tax 1,00,000 .00
Marketing 40,000.00
Property Operation & Maintenance 50,000.0
/ ~

0
~ J,-, 012 . Make the Income Statement
with Schedules froffi the following info
,! ' '.> .lcO\ ~ in the books of ABC Hotel
:
rmation
.
~ D·, '7--- Food Sales Rs.- -1,50,000 Rent & Rates Rs. 5,000

,.
~
0
Beverage Sales
Oth er Income
Cost of Safe--Food
Beverage
·
Rs. 1,30,000
Rs. 40,000
35% of Food Sale
Depreciation
Interest
Income Tax
Rs. 6,000
Rs. 5,000
Rs. 20,000
20% of Beverage Sale
(251-B)
r

HOTEL ACCOUNT, FINANCIAL AND F & B MANAEMEN

T
Controllabte Expenses :
..
Salary & Wages 10% of Food & Beverage Sale
Employees Benefit _. 24% of Salary & Wages
Direct Operationel .Ex~_
~ses Rs. 1,500 _
Marketing Expenses Rs. 5,000
Energy & Utility Expen~es Rs. 3,000
Repair & Mainten-arice Rs. 2,500

013. The follwing balances were extracted from · the

accounts · of Moo·n· Moon
Restaurant on 31 s't P~'Cember 1997 ·:
-., .. -
Stock of 1st January 1997 : Rs. P.
Food · 10,1 50.0 0
Beverage . . 8,SOO:OO ··
__.,/---· .

Cigare;1es- - - - 1 1,50 0.00

·:
1
, 1• ·• Purchas·e·s-·: / --
, Foo~ 1,95,000.00
Beverage .· 95,000.00
1
- _ Cigarnttes 12,000.00
. :·::_1 'Sa·1es : .
. .··. , , · \
.,\ _1 .,',
Food · 4,25,000.00
. _ . >\ : . Be~~rage 2,35,000.00
-. , - ·, ·· _qfgarettes 14,000.00
- . . ·-:,wages & ·Salaries 49,000.00
_ "; . , ;'.lfght & :~eat _- 19,000.00 .·
-., ·. . >~1~ ianing Material 3,100.00
_ Posta:ge & Stationery 1,500.0.0
- ··'- ~ • L~~ndry
1

4,900:bo
: .• c~§Jit & Taxes . 8,000.00
-.-_ Advertising 5,000.00
·:,.~ Repair & RepJacement 1,,000.00
tiepleciation 14,000.00
You are tequir:ed to prepare the restaurant's Trading,
Profit & Loss account for the
year ended on 31st December 1'997. · I
ri1J£ri'! ·: )Tfli ·u(fr:,;o!l,Jt odl :,·1 0 ll ,.
•1 1
I' ' (

Stock ~f~fs_t' December, 1997 were valued as follow

s :
(10(1. ~ _:i i F~o~n i> Ji_l' r., , ,, 1, Rs. )8,50 0.00
·S'.) J ~j ·.~ ,; ·Beverage · .r ..1
1
Rs .' 6,000.00
1~ ,r:,. ,· _ .Cigarettes ' •, Rs. 1,200.00
-
• 1 ; {I ."". ' • .,,- .
All Indirect Expenses are to be apportioned on the basis of \ •
sales or turnover.
(251-C)
 UNIFORM SYSTEM OF ACCOUNTANCY

014. Prepare the Income statement and Balance

Sheet (as per Uniform System
\ .,, . pf1Accountancy) in the books of XYZ Hotel as on
31st December 1999 from the
\ / \....,/" following Trial Balance given below :
Dr.
Cr.
Rs. P. Rs. P.
ost of Sa.le-----Food ·80,000 00 Sale------Room
, 5,00,000 00
Beverage 50,000 00 Food
General Expenses 3,00,000 00
I) 5,000 00'" Beverage 2,00,000 00
Office Expenses 10;000 00 Sundry Creditors 50,000 00
IY lnter~~t · • i,00000 Bills Payable
alaries & Wages 1,00,000 00
I) 30,000 00 Debentures
Electricity & Power 50,000 00
_5;00000 erefe.rence Shar~s
D f el~phone & Fax 1,00,000 00
15,0oo 00 Equity ShareS- , 2,00,000 00
preciation 50,000 00
D Bills Re,ceivable
General Reserve 2,00,000 00
50,000 00 Capital Reserve · 3,00,000 00
IY ;Sundry Deb!ors 1,00,000 00 OutstaAdin9; Rent 5,000 00
Furniture & Fixture 5,00,000 00
) Loan (Short Term) 25,000 00
Cutr~ry, 'crockery 75,000 00
) Kitchen Equipments 80,000 00
Laun~ry Equipments 80,000 00
j
Machinery 1,50,000 00
Cash in Hand 9,000 00
Cash at Bank 80,000 Od
Shares of TISCO 2,00,000 00
Advance Paid to Staff 2,00,000 00
Land & Building
"' .
2,70,000 ,00
20,30,000 00
2-Q,39,00 0 00

015 . Prepare the Balance Sheet (Report Form) from

the following Trial Balance:
Debit {Rs.)
Credit (Rs .)
Cash in Hand · 2,000.00 Sundry Creditors 10,000.00
Cash at Bank . 20,000.00 General Reserve 15,000.00
Prepaid Salary 5,000.00 Capital. Reserve 10,000.00
Sundry Qebt~rs 25,000.00 . BiHs Payable· 7,000.00
Bills Receivable 10,000.00 De~entures 15,000.00
Stock 8,000.00 Long Term Loan 18,000.00
Plant & ~,~c~inery 15,000.00 qu,tst~nding Rent 5,000.00
Kitchen ~~ipments 10,000.00 Short Term Loan 3,000 .00
Land & ~~ilding 35,000.00 Ca~ital , . 30,000.00
Undistributed Profit 17.000.00
1,3a,ooo.oo 1,30,000.00

(251-0)
 HOTEL ACCOUNT, FINANCIAL AND F & B MANAEME
NT
O~~- ~r?,m the following Trial Balan~e prepa~e Inco
me Statement and Balance
Sheet m -the boo ks of Mis ABC Restaurant as on 31st December -·199
9: .
,,_ppening Stock----Food 2,000.00 Sale-------Food 4,00,000.00
· Beverage 1,000.00 -··· Beverage
' P~rcha.s~s--------Food _ - 2,00,000:00
1,00,000.00 - SundrfCreditors 10,000.00
Beverage 50,000.00 , Bills Payable
.Office Expenses -s,000.00
4,000.00 Capital 30,000.00
: Telephone
3,000.00 General Reserve _ s,000.00
Sundry E~penses
5;000.QO Capital Reserve ; 6,000.00
Electricity & Power
8,000.0;0 Loan 12;00Q.00
Rent
10,000.00. · Outstanding Commission . 5,000.00
,'Interest
5,000.00 ,_ Out~tanding Interest 6,000.00
:·Depreciation
6;000.00 · _Qebentures .10,00_0.00
Sundry Debtors
50,000~00
Bills Receivable 40,000.00
· ·Furniture & Fixture
-45,000.00
Cutlery, Crockery · '40,000.00 .
kitchen Equipment 20,000.do
Land & Building 1,45,000.00
.cash in Hand 5,000 .00
Cash ·at Bank 1,3s,ooo.qo
Prepaid Expenses 15,000.00
6,89,000.00 · ,.6,89,000.00 ~

Q17. The following balances were extrac_ted from ~

the books of r.Gr~at '~estau~ant
a~..on -31stDecember 2000. You are required to 411
prepare the restaurants Trading, '
Pt ofif ,8t L-ess Account :
- -~- ~Sales----------------------------Food
3,0o,ooo :oo
Beverage 75,000.00
OP,ening Stock----------------Food
~ · -n.• _· 2,000.00
_ Beverage 1,000 .00
·purchases------------------~-- Food
90,000.00
B"everage 30,000.00
· bepartmental Expenses----F-dod
. ~-
15,000.00
Bev·e·r~ge 5,000.00
: Oiti~r Expenses------- O~"icij' 'Rent' 4,000.00
· r rrJ )r . l~tarest·
i,-. J. ·-c,r· :_ • .,Jla~'fie1 1
1f~1 e,x·penses
8.,9~9,-90
~,POO~OO
1

r_:).JOC.t ) 'r 'II tit '

J
' 3 0Q0.00
.:r: ·~ ' · , A;; ;~1~~~~nt 6:oo'o'.'oo
Insurance 2,000.00
Depreciation 7,000.00
Closing Stock (31·12·2000); Food· Rs. 2,000; Beverage·
Rs. 1,000. All other costs are to apportined to the ratio· of
3:1.
(251-E)
 · UNIFORM SYSTEM Of ACCO~NTANCY

018. Fi~d out the Gross Profit. Depactmental:Profit and Net Profit (Statement Form)
from the following information in the books of XYZ .Hotel : ·
Rs. P.
Sales------------------------ Room a,-oo·,600:bo
Food 2,00,000.60
Beverage 50,000.00
Opening Stock------------ Food .·,· · 1,000.00
Beverage 500.00 -
Purchases------------------ Food 75,000.00
. Beverag·e . 20,000.00
Departmental Expenses----Room 1,00\' 060:06 . .;
'

Food 30·,000;00
Beverage . 5,000.00
Ofnef ' E-xp'enses·:
1

Wages & Salary . 12,000.00

L. T. C. 7;000.00
General Expenses· 5,000.00
Advertisement 10_,000.00
Interest 7;'000.00
1~ .· .

· lnst:frandt Premium . L
8;'0 00.00 ··. '...

Note : Othe·r Experrs-es are to be apportioned on the following basis· :

(i) Wages & Salary and L.T.C.-in the ratio 3: 2: 1 to Room, Food & Beverage
respectively.
(ii) General Expenses and Advertisement to be in the ratio of 3 : 1 : 1 to
Room, Food & Beverage respectively.
(iii) Interest to be apportine'd Rs. s,·ooo for Room and Rs. 2,000 for Food.
(iv) Insurance Premium to be apportioneq between Room and Food in the
ratio of 3 : 1 respectively.

019. You are required to prepare Trading, Porfit &.Loss Account in the books of
Himland Hotel a.s o'n 31st December 2000 :
Rs. P.
Sales----------------------------------Room 10,00,000.00
Food 2,00,000.00
Beverage 50,000.00
(251-F)
 HOTEL ACCOUNT, FINANCIAL AND F & B MANAEMENT

Opening Stock--------------------- Food 1,000.00

Beverage 1,000.00
Purchases--------------------------- Food 40,000.00
Beverage 10,000.00
Departmental Expenses :
Salaries & Wages--------------Room 5,000.00
Food 4,000.00
Beverage ·1,000.00
Other Departme~tal Expenses--- Room . 50,000.00
Food 8,000.00
Beve,rage 2,000.00
Other Expenses :
telep_hone & Internet 10,000.00
Depreciation 5,000.00
Interest 2,500.00
Office Expenses 7,500.00
Commission 15,000.00
Repair & Maintenance 5,000.00
. Electricity & Power 12,500.00
,Water 2,500.00
Closing Stock as ~:m 31st December ?000.i!_Fqod- Rs'. 1,SOQ: Beverage - Rs. 500 .
. All Other Expenses are
to be apportioned among Room Food and Beverage in the
I

ration of 3 : 1 .: 1. · ~

,,
I

( 1 1 ,1

. '/

(251-G)