Question

Gene Washburn owns used and cost of food so Income Statement 169 Problem 2 hburn owns the GW Cafe and needs assistance in determining both cost of food cost of food sold for June 20X6. He provides information as follows: Beginning food inventory $10,500 Food purchases 24,000 Cost of employee meals 500 Cost of promotional meals 300 Transfers from the beverage department 100 Transfers to the beverage department 150 Physical food inventory, end of June 20X6 8,400 Required: 1. Determine the cost of food used. 2. Determine the cost of food sold.

Answer 1

Computation of Food sold

Beginning Inventory	10500
Purchases	24000
Transfers from beverage dept.	100
Total Input	34600
Less:
Transfers To beverage dept.	150
Closing Inventory	8400
Total Cost of food used	26050
Total Cost of food used	26050
out of which
Cost of promotional meals	300
Cost of Employee meals	500
Balance is Cost of Food Sold	25250

so,

Cost of food used	26050
Cost of food Sold	25250

Please comment in case of any query regarding the solution.