Mr. Ahmed was thinking to start his own business but was not sure in which industry...

 

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Mr. Ahmed was thinking to start his own business but was not sure in which industry he should invest. One of his friends has suggested him to consider the hospitality industry. So, he has decided to invest in a hotel & restaurant business. After making a decision to invest in hotel & restaurant named as "Hot & Cold", he made the following transactions in the first year: 1. Invested $1,000,000 in Hot & Cold and deposited the same in business bank account. 2. Purchased building for $100,000 and furniture for $ 50,000 by cheque. 3. Purchased fixtures and computers by cheque $ 20,000. 4. Purchased goods for $30,000 by bank. 5. Paid the salaries $40,000 by bank. 6. Purchased motor vehicles from MA motors Itd. for $60,000 on credit. 7. Got a loan of $300,000 from the bank. 8. Paid $59,000 to MA motors Itd. in full settlement. 9. Paid utilities bill $20,000. 10. Total Sales (food and room services) $ 450,000 on cash. Cash was then deposited into the bank. 11. He purchased a new car for his son on his birthday for $20,000 and paid from the business bank account. 12. He paid for business telephone bill $5,000 from his personal bank account. Required: a) Discuss unique aspects of the Hospitality Industry in detail with examples. (15 -Marks) b) Discuss the purpose of accounting in the hospitality industry. (10 - Marks) c) Prepare journal entries for the above transactions. (24 - Marks) d) Prepare all the "T-accounts" from the above records. (26- Marks) e) Prepare the trial balance for Hot & Cold at the end of the year. ( 10- Marks) Mr. Ahmed was thinking to start his own business but was not sure in which industry he should invest. One of his friends has suggested him to consider the hospitality industry. So, he has decided to invest in a hotel & restaurant business. After making a decision to invest in hotel & restaurant named as "Hot & Cold", he made the following transactions in the first year: 1. Invested $1,000,000 in Hot & Cold and deposited the same in business bank account. 2. Purchased building for $100,000 and furniture for $ 50,000 by cheque. 3. Purchased fixtures and computers by cheque $ 20,000. 4. Purchased goods for $30,000 by bank. 5. Paid the salaries $40,000 by bank. 6. Purchased motor vehicles from MA motors Itd. for $60,000 on credit. 7. Got a loan of $300,000 from the bank. 8. Paid $59,000 to MA motors Itd. in full settlement. 9. Paid utilities bill $20,000. 10. Total Sales (food and room services) $ 450,000 on cash. Cash was then deposited into the bank. 11. He purchased a new car for his son on his birthday for $20,000 and paid from the business bank account. 12. He paid for business telephone bill $5,000 from his personal bank account. Required: a) Discuss unique aspects of the Hospitality Industry in detail with examples. (15 -Marks) b) Discuss the purpose of accounting in the hospitality industry. (10 - Marks) c) Prepare journal entries for the above transactions. (24 - Marks) d) Prepare all the "T-accounts" from the above records. (26- Marks) e) Prepare the trial balance for Hot & Cold at the end of the year. ( 10- Marks)

Answer rating: 100% (QA)

Step 1 Introduction Journal entries Journal entries refer to the recording of transactions and events related to the business from source documents It includes both debit and credit aspects T accounts ... View the full answer