Reference no: EM132791739
The Gulf Hotel has been operating for seven years. Its market is value - minded travelers who enjoy comfortable rooms and a variety of complimentary services, including a hot breakfast with delicious offerings. The Hotel's other amenities are high-speed internet access in all rooms, wireless internet access in the lobby and meeting rooms, 24-hours coffee in the lobby, local calls, and in-room movie channels. The Gulf Hotel is family owned. A close family friend, in public practice, serves as the hotel's accountant and has designed the hotel's financial reporting system. The friend has no hospitality experience or education.
The current system consists of two reporting segments:
(1) a revenue center that includes rooms, restaurant, and gift shop (no liquor is sold on premises); and
(2) a support center that includes marketing, administrative, maintenance, and utility cost.
Income from vending machines is credited to the administrative department. Essentially, the income statements prepared for the Hotel Domain's management are:
- The Hotel Income Statement
- One Revenue Center
- One Support Center
Problem 1: Explain how the departments should be structured for reporting in accordance with the Uniform System Of Accounts For Lodging Industry.
Problem 2: Explain whether the accountant should be retained or not.