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Pinetree Motel

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Submitted By kjpt102404
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Case Paper on Pinetree Motel

ACC5000
Financial Accounting

Submitted to:

Professor Fe Violeta G. Baluran

Submitted by:

Presenting Group 2

Kelvin Go
Alice C. Lee
Kristian Jewel P. Taiño

17 October 2009

CASE BACKGROUND

The Pinetree Motel is owned by Mr. and Mrs. Ilyong Kim and was purchased way back 1998. It is a 20-unit motel and was located near a vacation area that was [popular during summer and winter seasons. The Kims had been longing to have a business of their own – that’s why they ventured in this kind of.

The couple felt that they had been successful. Each year saw a growth in revenue from room rentals, their bank balance had also increased. Their customer turnaround had been evident as well, maybe because of their efforts in providing a consistently clean rooms and up-to-date furnishings.

Because of the lack of formal training, problems started to arise and this alerted them to management issues and concerns. Though the couple devoted their time in the business, they have hired a part-time help for daily room cleaning tasks. They also lack dining facilities the reason why the vending machines are installed to supplement room rentals; in which the vending machine company provides the servicing and maintenance.

Mr. Marcus Carter is a frequent guest in Pinetree Motel became acquainted with the Kims. In the year 2006, Mrs. Kim showed Mr. Carter the current issue of the motel trade journal that contains data for motels with 40 or fewer units for the calendar year 2005. As the figures show, the motel had a profit of 21%. The profit last year was $134,003 on sales of $244,461 – or 55%. The Kims said it was their best year to date, however, the figures doesn’t jibe with that of those in the magazine. In this regard, the Mrs. Kim sought Mr. Carter’s help.

Interested to help, Mr. Carter told Mrs.

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