Question

Greg's Diner has the following information for year 2, when several new employees were added to the waitstaff:
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$2,000,000
Cost of food serveda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000
Employee wages and salariesb . . . . . . . . . . . . . . . . . . . . . . . . 500,000
Manager salariesc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Building costs (rent, utilities, etc.)d . . . . . . . . . . . . . . . . . . . . . 300,000
a5 percent of this cost was for food that was not used by the expiration date and 10 percent was for food that was incorrectly prepared because of errors in orders taken.
b15 percent of this cost was for time spent by cooks to reprepare orders that were incorrectly prepared because of errors in orders taken.
c20 percent of this cost was time taken to address customer complaints about incorrect orders.
d80 percent of the building was used.

Required
a. Using the traditional income statement format, prepare a value income statement.
b. What value would there be to Greg from preparing the same information in year 3?

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