Each year Mary K holds an annual “PP-Lua at the town’s Pet Restaurant. This includes dinner & spa for the puppies & their owners. The PPLua is catered by Dr. M & will charge all food & bev costs for the pets 10 yrs & under on an AmEx card. This yr Dr M’s catering bill totals $2,000. So MaryK used Dr. M's AMEX card to pay for this portion of the bill. Mary K budgets $12,000 for the event for all costs. Food & bev costs account for 60% of all expenses. MaryK actual expenses came in on budget this yr.
Local corporate sponsors contribute an additional $5,000 to Mary K, the local PetsMart store also agreed to contribute $9,500 this yr. Ticket sales & other revenue items for MaryK were as follows:
Food & Beverage sales: $7,120
Sponsorships: calculate Petsmart contribution
Instructions
(a)Assume a 4% service fee is charged by American Express. Record the entry for the transaction on the restaurant's books for Dr. Miller’s AMEX credit card transaction .
(b)Record the entry that the restaurant will make when it receives payment from American Express.
(c)Is this years Puppy Paradise Lua profitable? What amount of net income or net loss will MaryK’s House record from this event? List out all revenue components … and all expenses … and calculate net income.
2006-08-29
12:29:32
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3 answers
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asked by
igartua69
1