Rent has not always been listed as a department expense. When any department uses rentable space, a charge for space occupied should be included in the cost of running the department. The above classifications are based on the assumption that the management of the building may furnish service to the tenants, such as ice, water, towels, etc. Any statement prepared should indicate the income received from tenants compared with the operating cost. A statement should also be prepared showing the renting condition of the building. This statement should give at least the total for each of the following items: I. Total rentable area. 2. Total square feet rented. 3. Average rental being received per square foot. 5. The estimated average price per square foot and the total This is for the purpose of showing the estimated loss of rental due to vacancies. The foregoing can be modified and adapted to the requirements of loft buildings and apartment houses. If the investor has erected an hotel and restaurant, an entirely different set of statements must be prepared. The main differences deal with the form of the operating statement and provision on balance sheets for inventories of silver, linen, dishes, room furnishings, etc. A statement of income should include: In addition there would be deducted from the profit: 1. Legal Expense 2. Bad Debts 3. Insurance 4. Ground Rent, if leasehold 5. Taxes (State, City, and Federal) 6. Interest on Mortgages 7. Interest on Bank Loans Wages should be analyzed. Some of the more important wage classifications are: The difference between the total of the above items and the total revenue received would be the profit on restaurant income. An analysis of the other departments should be made along similar lines. A room statement should be prepared showing by floors the amount of revenue received, the number of rooms occupied, the average revenue received from rooms, the number of occupants, the number of rooms vacant and the percentage of rooms occupied. A feature that must be watched in a hotel venture is the number of "banks" or imprest funds given to the various department cashiers. A fund is kept not as one available for the payment of current charges, but as a bank for changing currency and as a cash drawer for accepting cash settlement of charges (restaurant and other tickets). The check of the total currency is a little more difficult than that of a "bank" used for the same purpose in a retail store. CHAPTER XXV THE ARCHITECT'S ACCOUNTING SYSTEM Architect's Services The architect's professional services consist of the necessary conferences, the preparation of preliminary studies, working drawings, specifications, large-scale and full-size detail drawings; the drafting of forms of proposals and contracts; the issuance of certificates of payment; the keeping of accounts; the general administration of the business and supervision of the work. The fee he receives from the owner for these services is a percentage computed upon the cost of the work in respect of which such services have been performed. The Appendix contains a copy of the complete agreement between an owner and an architect (Form F) and also a copy of the schedule of charges adopted by the American Institute of Architects (Form G). Accounting Records The accounting records employed in an architect's office may be divided into the three following groups: 1. General Books of Account (a) General Ledger (b) General Journal (d) Voucher Register (e) Payroll Record 2. Contract Records and Accounts Contract Certificate Ledger |