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Hospitality Financial Management Question Paper
Hospitality Financial Management
Course:Bachelor Of Science In Hospitality And Tourism Management
Institution: Kenyatta University question papers
Exam Year:2008
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2007/2008
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF
BACHELOR OF SCIENCE IN HOSPITALITY & TOURISM MANAGEMENT
HIM 311: HOSPITALITY FINANCIAL MANAGEMENT
_____________________________________________________________________
DATE: Tuesday 17th June, 2008
TIME: 2.00 – 4.00 p.m.
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INSTRUCTIONS:
This paper comprises of sections A, B and C. Answer all questions in Section A and
B. Answer only ONE question in Section C. All monetary value is in Kenya
shillings.
SECTION A
Answer ALL questions in Section A and B.
1. Briefly discuss the concept of periodic inventory control.
(4 marks)
2. Explain why an accumulated depreciation contra-asset account is necessary in
accounting.
3. Why should a change in revenue mix of a restaurant menu have an effect on gross
profit even though there is no change in total revenue?
(4 marks)
4. Discuss absolute and relative changes with reference to comparative financial
statement(horizontal). Use a restaurant financial statement example.
5. List and explain four possible operating ratios that could be used in a food
operation.
(4 marks)
SECTION B
As the manager of the Safari Hotel, you have received your first balance sheet
conduct a comparative, horizontal analysis of the change in each current asset account
from year 1 to year 2. Express each change in shillings and the percentage each
change represents. Comment of each change that exceeds 10%.
Current Asset
Year 1
Year 2
Cash
12,800
14,720
Credit card receivables
2,800
3,360
Accounting receivables
420
100
Food inventories
4,280
6,377
Beverage inventories
1,850
1,762
Prepaid expenses
1,400
16,110
23,550
25,958
(30 marks)
SECTION B
Answer one question from this section.
7.
You have the following information taken from the balance sheet for two
successive years of the Serena camp and service lodge.
Year 002
Year 003
Total assets
411,200
395,700
Total liabilities
302,400
315,500
Total stockholders’ equity
108,800
80,200
For each year calculate:
(a) Total assets to total liabilities ratio.
(5 marks)
(b) Total liabilities to total assets ratio
(5 marks)
(c) Total liabilities to total ownership equity.
(5 marks)
Discuss the changes that have taken place over the two year period from the
viewpoint of your employer who is interested in buying the camp.
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SECTION C
Answer ONE question only from this section.
8.The sales records for a coffee shop that has only six items on its menu show the
following quantities sold during the month of January. Item standard cost and
selling prices are also indicated.
Item Cost Selling Price Quantity Sold
1
20=
60=
654
2
11=
45=
2,196
3
22.50
70
1110
4
17.50
50
990
5
22.50
50
295
6
20
79.50
259
Actual cost for the month of January was 92,010. Actual revenue was 300600.5
(a) Calculate the standard cost percentage and the actual cost percentage for
January. Round all amounts to the nearest shilling. (10 marks)
(b) Compare the results. If you were the Restaurant Manager explain why you
would or would not be satisfied with the results.
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