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Financial Management In Hospitality And Tourism Question Paper
Financial Management In Hospitality And Tourism
Course:Master Of Science In Hospitality And Tourism Management
Institution: Kenyatta University question papers
Exam Year:2008
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2007/2008
INSTITUTE OF OPEN LEARNING
EXAMINATION FOR THE DEGREE OF MASTER OF SCIENCE (HOSPITALITY AND
TOURISM MANAGEMENT)
HIM 501: FINANCIAL MANAGEMENT IN HOSPITALITY AND TOURISM
DATE: FRIDAY, 11TH JULY 2008 TIME: 2.00 P.M. – 5.00 P.M.
INSTRUCTIONS:
This paper comprises of three sections A, B and C. Attempt all questions in Section A.
Answer only one question in Section C. All monetary value is in Kenya shillings.
SECTION A
QUESTION ONE
Discuss periodic inventory control and explain why an accumulated depreciation
contra-asset account is needed to accumulate depreciation expenses charges.
(20 marks)
QUESTION TWO
Under what circumstances might the individual account balances not be correct even though a trial balance is in the balance.
(15 marks)
QUESTION THREE
Explain the straight line depreciation method.
(10 marks)
QUESTION FOUR
List four possible operating ratios that could be used in a food operation.
(15 marks)
SECTION B
QUESTION FIVE
A fast-food restaurant at Kenyatta University features only (3) three entries items on its menu with the following cost and selling prices.
Item 1 2 3
Cost 100 220 270
Selling Price 330 440 675
(a) For each item calculate the food cost percentage.
(b) If 50 of each item are sold each day, what will be the standard food cost percentage?
(c) If only 25 each of items one and three were sold and 100 of item two. Discuss the effect in relation to the standard cost percentage.
(20 marks)
SECTION C
QUESTION SIX
A restaurant in Nairobi’s CBD reported the following: Current assets:
Cash 12,000
Credit card receivables 1,800
Accounts Receivables 180
Food inventory 4,400
Prepaid expenses 1,120
Current liabilities 7,800
(a) Calculate the current ratio
(b) Calculate the quick ratio (acid test)
(c) Calculate the working capital and describe what it means.
(20 marks)
QUESTION SEVEN
A restaurant owner expressed concern over the charges in cash, credit receivables,
food and beverage inventories in the months of July and August of the current year.
Using comparative analysis to show him the shilling and the percentage charges. In
addition use the common size (vertical) analysis to further demonstrate the various
charges. Explain the charges advising him where and why improvement is needed.
Cash Credit card receivables Food Inventories Beverage Inventories Total
July 8,880 1,240 4,480 2,220 16,820
August 7,104 1,984 6,284 1,887 17,247
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