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:

1. Prepare Journal entries to record Employee meals for May (3 Marks).
2. Prepare an Income Statement Extract showing the Cost of Foods Calculation

(8 Marks).

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