Mr. Spiteri is a Sole Proprietor with multiple Investments all over the world Mr Spiteri also has Investments in Malta: Finance Management Assignment MBS Malta, Europe
|University||Malta Business School(MBS)|
Mr. Spiteri is a sole proprietor with multiple investments all over the world. Mr. Spiteri also has investments in Malta. The main investment that Mr. Spiteri has in Malta is that of one of the leading Hotels in the hospitality industry. Mr. Spiteri has asked you to prepare for him a Profit and Loss account for the year ending 31st December 2020 and a Balance Sheet as of that date taking into consideration the notes at the end of the year. Mr. Spiteri, trust you so much that he has also asked you to provide him with a short write-up on the performance of his hotel.
a) Stock as of 31st December 2020 amounts to €5,224,000
b) Rent covers the period 1st January 2020 to 31st March 2021
c) Insurance owing amounts to €40,000
d) Depreciation on shop Fittings is calculated at 10% per annum on cost and on Equipment at 25% on book value. There is no depreciation on Buildings.
e) Provision for Doubtful Debts is to be made up to € 760,000
ABC-123 Complex is an infrastructure that houses a hotel and an internal separate restaurant. You are required to:
A) Prepare the Profit and Loss Account of each department for the year ending 31st May 2020.
B) comment on the suggestion that the Restaurant Department should be closed.
The following balances were extracted from the books on 31st May 2020:
The following are to be taken into consideration:
(1) During the year to 31st May 2020 the proprietor took the following at cost for her own use:
Living in the hotel for the whole year amounting to € 150,000
Eating at the restaurant for the whole year every day amounting to € 80,000
(2) The total expenses incurred for the complex and the way in which they are to be distributed between the two departments are shown below:
Rent €5,000,000 In proportion to the floor area
Wages €7,500,000 In proportion to sales
Heating & Lighting €4,000,000 In proportion to floor area
Selling Exp. €3,000,000 In proportion to sales
Note: Floor area in square metres Hotel 400,000sq.metres