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

Cash budget for the first quater of 2021

Cash inflows:. Rs.(Inlaks)

Opening balance. 1

Single room. 432

Double room. 855

Suits. 787.5

Ball rooms. 104

Meals. 216

Cash outflows:

Staff for kitchen. 25.92

Local tax. 0.6

Room service staff. 21.6

Lower staff. 4.5

Out sourcing of solar panels. 2

Closing balance. 2340.878

Working note:

1.single room (70-10)*8000*90(days)

2.double room. (60-10)*19000*90(days)

3.suits. (35-10)*35000*90(days)

4 ball rooms.

4*8days permonth*3months*130000

5.kitchen meals income 90*8000*30staff

6.payment to staff. (90*8000*30)*18%

7. Room service staff. 18000*40*3months

8. Lower staff. 15000*10*3 months