The KA Motel (KAM) has two operated departments: rooms and food. The following information is supplied to
Question:
The KA Motel (KAM) has two operated departments: rooms and food. The following information is supplied to you as of December 31, 2020.
Account
Account Balance
Rooms department- salaries and wages
EUR 350,000
Food department- salaries and wages
EUR 200,000
Supplies and other- food department
EUR 40,000
Food purchases
EUR 220,000
Rental revenue (lobby space)
EUR 21,000
Room sales
EUR 1,400,000
Cost of food sold
?
Food sales
EUR 500,000
Food- allowances
EUR 3,000
Supplies and other- room department
EUR 50,000
Other information is as follows:
-The beginning and ending inventories of food were EUR 5,000 and 7.000 respectively. Food consumed by the food and A&G department employees during the year (free of charge) totaled EUR 2,000 and EUR 1,000 respectively.
-Fringe benefits and payroll taxes for all employees, including free food, are 30 percent of gross salaries and wages.
Required: Prepare the top portion- that is, the operated departments section- of the income statement according with the USALI.
Expert Answer:
