II. Income Statement Questions Problem 1 What is the gross profit percentage for a hotel, if the total revenue consisted of rooms revenue $3,075,975 and F&B revenue $943,425? The rooms departmental expenses were 26.4% of rooms revenue and the F&B departmental expenses were 69.6% of F&B revenue; the undistributed operating expenses were 24% of total revenue; management fees represented 4% of total revenue; rent, property taxes & insurance were $401,940; interest and depreciation expenses were $241,164. Solution Answer: Gross profit = Total Revenue - Cost of services sold (Usually the fixed expenses are not taken into account while computing gross profit). So it is the profit prior to deducting sellling, general and administrative expenses and prior to nonoperating revenues, nonoperating expenses, gains and losses So Total revenue = $3,075,975 (Rooms revenue) + $943,425 ( F&B revenue) = $4,019,400 Cost of services sold : rooms departmental expenses = $3,075,975*26.4% = $812,057.4 F&B departmental expenses     = $943,425*69.6% = $656,623.8 undistributed operating expenses = $4,019,400*24% = $964,656 Total of cost of services sold =                                 $2,433,337.2 Gross profit                                    =                            $1,586,062.8 Gross profit percentage = (Gross profit/Total revenue)*100 = ($1,586,062.8/$4,019,400)*100 = 39.46% .

1. II. Income Statement Questions
Problem 1 What is the gross profit percentage for a hotel, if the total revenue consisted of rooms
revenue $3,075,975 and F&B revenue $943,425? The rooms departmental expenses were 26.4%
of rooms revenue and the F&B departmental expenses were 69.6% of F&B revenue; the
undistributed operating expenses were 24% of total revenue; management fees represented 4% of
total revenue; rent, property taxes & insurance were $401,940; interest and depreciation expenses
were $241,164.
Solution
Answer:
Gross profit = Total Revenue - Cost of services sold (Usually the fixed expenses are not taken
into account while computing gross profit). So it is the profit prior to deducting sellling, general
and administrative expenses and prior to nonoperating revenues, nonoperating expenses, gains
and losses
So Total revenue = $3,075,975 (Rooms revenue) + $943,425 ( F&B revenue) = $4,019,400
Cost of services sold : rooms departmental expenses = $3,075,975*26.4% = $812,057.4
F&B departmental expenses    = $943,425*69.6% = $656,623.8
undistributed operating expenses = $4,019,400*24% = $964,656
Total of cost of services sold
=Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $2,433,337.2
Gross profit                                  Â
=Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $1,586,062.8
Gross profit percentage = (Gross profit/Total revenue)*100 = ($1,586,062.8/$4,019,400)*100 =
39.46%