The Five Star Hotel uses the periodic inventory accounting method. The following Information is available to you for the month of May:

Opening Stock

$95,000

Purchases

$980,000

Closing Stock

$60,000

Free Employee Meals:

Production Department

$30,000

Marketing Department

$55,000

Required:

i.Journal entries to record Employee meals for May (3 Marks).

ii. Income Statement Extract showing the Cost of Foods Calculation

(8 Marks).

iii.Explain the difference in accounting for employee meals using a perpetual inventory method and a periodic inventory method (4 marks).