To: Mrs. Noland
From: Mr. Marcus Carter
Date: May 2006
Subject: 2005 Operating Statement for Buccaneer Motel

Mrs. Noland, thank you for providing the extra information I requested in such a timely manner. I have put together an Operating Statement for the Buccaneer Motel for the 2005 Fiscal Year. A couple points of interest, the expenses that were charged in 2004 but paid in 2005 were deducted from the 2005 fiscal year because those occurred in the 2004 fiscal year. The expenses that were charged in 2005 but not yet received will be added to the 2005 fiscal year and become an accrued liability. I also see where you have $30,280 in depreciation charges. I used the straight-line depreciation method over a 5 year period to record this transaction. The following is the Operating Statement for the Buccaneer Motel for the 2005 Fiscal Year along with percentage composition of each expense:
Revenues:
Room Rentals $235,158 96.8 Other Revenues 7,703 3.2 Total Revenues $242,861 100.0

Operating Expenses: Payroll Costs $112,738 46.4 Administrative & General 8,800 3.6 Direct Operating Costs 1,660 0.7 Fees & Commissions 2,936 1.2 Advertising & Promotion 2,731 1.1 Repairs & Maintenance 27,927 11.5 Utilities 8,580 3.6 Total $165,372 68.1

Fixed Expenses: Property Taxes, Fees $ 9,903 4.1 Insurance 9,559 3.9 Depreciation 6,056 2.5 Interest 10,497 4.3 Total $ 36,015 14.8

Profit (before taxes) $ 41,474 17.1

In conclusion, I would not worry about trying to compare figures to a magazine. They are good for reference