Javelin Cycling Vacations Ltd. offers cycling tours in Canada and France. Each year a single tour is offered. For 2022, the company is offering a tour of the Continental Divide. Following is an estimate of the revenues and costs for this tour: Revenue Expenses: JAVELIN CYCLING VACATIONS LTD. Continental Divide Tour Revenue and Expenses Forecast for 2022 Tour guide salaries¹ Promotion² Gratuities office and equipment insurance³ Group accident and life insurance Depreciation Tour support employee salaries¹ Bicycle maintenance Customer meals Hotel and camping costs Administrative and office expense Tour coordinator salary Total expenses Net operating income (loss) $ 233,500 Net operating income (loss) $ 67,000 17,700 9,900 3,900 8,900 9.900 With Tour 37.500 8,900 29,500 29,500 Javelin will incur a cost of 5% of the salaries in severance costs when employees are terminated Promotion costs have already been incurred. Office and equipment insurance is paid in advance of commencement of the tour. 4Insurance is payable only if the tour is confirmed. These expenses are for booking accommodations, arranging meals, and providing communication services during the tour. 3,950 39,500 266, 150 $ (32,650) Required: 1-a. Compute the net operating income (loss) in both cases when tour is offered and tour is not offered. (Negative amounts should be indicated with a minus sign.) Without Tour
Javelin Cycling Vacations Ltd. offers cycling tours in Canada and France. Each year a single tour is offered. For 2022, the company is offering a tour of the Continental Divide. Following is an estimate of the revenues and costs for this tour: Revenue Expenses: JAVELIN CYCLING VACATIONS LTD. Continental Divide Tour Revenue and Expenses Forecast for 2022 Tour guide salaries¹ Promotion² Gratuities office and equipment insurance³ Group accident and life insurance Depreciation Tour support employee salaries¹ Bicycle maintenance Customer meals Hotel and camping costs Administrative and office expense Tour coordinator salary Total expenses Net operating income (loss) $ 233,500 Net operating income (loss) $ 67,000 17,700 9,900 3,900 8,900 9.900 With Tour 37.500 8,900 29,500 29,500 Javelin will incur a cost of 5% of the salaries in severance costs when employees are terminated Promotion costs have already been incurred. Office and equipment insurance is paid in advance of commencement of the tour. 4Insurance is payable only if the tour is confirmed. These expenses are for booking accommodations, arranging meals, and providing communication services during the tour. 3,950 39,500 266, 150 $ (32,650) Required: 1-a. Compute the net operating income (loss) in both cases when tour is offered and tour is not offered. (Negative amounts should be indicated with a minus sign.) Without Tour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Javelin Cycling Vacations Ltd. offers cycling tours in Canada and France. Each year a single tour is offered. For 2022, the company is
offering a tour of the Continental Divide. Following is an estimate of the revenues and costs for this tour:
Revenue
Expenses:
JAVELIN CYCLING VACATIONS LTD.
Continental Divide Tour
Revenue and Expenses Forecast for 2022
Tour guide salaries¹
Promotion²
Gratuities
Office and equipment insurance³
Group accident and life insurance
Depreciation
Tour support employee salaries¹
Bicycle maintenance
Customer meals
Hotel and camping costs
Administrative and office expense
Tour coordinator salary
Total expenses
Net operating income (loss)
$ 233,500
Net operating income (loss)
$
With Tour
67,000
17,700
9,900
3,900
8.900
9,900
37.500
8,900
¹Javelin will incur a cost of 5% of the salaries in severance costs when employees are terminated.
Promotion costs have already been incurred.
Office and equipment insurance is paid in advance of commencement of the tour.
Ainsurance is payable only if the tour is confirmed.
These expenses are for booking accommodations, arranging meals, and providing communication services during the tour.
29,500
3,950
39,500
266, 150
$ (32,650)
Required:
1-a. Compute the net operating income (loss) in both cases when tour is offered and tour is not offered. (Negative amounts should
be indicated with a minus sign.)
Without Tour
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