1. With reference to the financial statements prepared for the 4C Company for Year 2004 (see Case 2), prepare a common-size statement. The local restaurant association provided Charlie with statistical data that are applicable for a table service, family-oriented, lunch and dinner restaurant similar to his (see next page). The data provide percentage ranges for typical elements of an income statement. Comment on how the operating income (income before tax) of the 4C restaurant compares to similar restaurants. Is this a valid comparison? Explain.

2. The guest count (covers) for the 4C restaurant for the year was 66,612. Determine the overall average check (revenue) for food and beverages. In your opinion, does the average check for food and beverages appear reasonable for a budget-conscious, family-type table service restaurant?

3. Calculate the cost percentages for food cost, beverage cost, and the total cost of sales as a percentage of sales revenue. How does cost of sales for food, beverages, and the total cost of sales compare to the ranges provided for a restaurant of this type?

4C Company Unadjusted Trial Balance December 31, 0004 Accounts Debit Credit Cash Credit card receivables Accounts receivable Inventories, food Inventories, beverages Prepaid insurance Equipment Furnishings Accounts payable Bank loan payable Common stock Revenue, food operations Revenue, beverage operations Purchases, food (net) Purchases, beverages (net) Salaries and wages expense Laundry expense Kitchen fuel expense China and tableware expense Glassware expense Contract cleaning expense Licenses expense Misc. operating expenses Administrative general expense Marketing expenses Utilities expense Insurance expense Rental expense Interest expense Unadjusted trial balance totals s 36,218 13,683 3,421 6,128 3,207 2,136 171,524 53,596 $ 8,819 163,518 50,000 458,602 180,509 181,110 38,307 221,328 16,609 7,007 12,214 5,906 3.205 4.101 15,432 6,917 7.918 1.895 24,000 23,981 $861.448 $861,448