Section 2: Problem Solving. Please make sure to read all instructions carefully before conducting any analysis. Problem A will require an excel file submission.

Problem A. Based on the following information, create a spreadsheet with one comparative and one common size monthly income statement in the proper format for the Middletown Restaurant and complete PART 1 and PART 2 for this question. Use the sample attached in Appendix A as a reference for the USAR format (At the end of this assignment).

• PART 1: Please set up your yearly income statement and two analyses including the following sections (15 pts)
  • Revenue
  • Cost of Goods Sold (Food and Beverage Costs)
  • Labor Expenses
  • Other Controllable Expenses (excluding labor costs, see other controllable expenses in the attached example, Appendix A)
  • Uncontrollable Fixed Expenses
  • Income before Taxes
  • Income Taxes (list federal and state income tax as separate items)
  • Net income

Dec. 2018 Dec. 2019 Food Revenue $80,000 Beverage Revenue $40,000 Food Cost $25,000 Beverage Cost $17,000 Salaries/Wages $30,000 Employee Benefits $ 6,000 Other Operating Exp. $5,000 Music/Entertainment $ 1,000 Marketing $ 3,000 Utilities $5,000 Admin/General $5,000 Repairs/ Maintenance $ 2,000 $91,000 $44,000 $27,000 $16,000 $32,000 $ 7,000 $ 6,000 $ 1,000 $ 3,000 $ 6,000 $5,000 $1,000 Rent/Occupancy Costs* $ 8,000 Interest* $ 5,000 Depreciation* $ 4,000 $ 8,000 $ 5,000 $ 4,000 Federal Income Tax (15% of Income before taxes) State Income Tax (5% of Income before Taxes)