Prepare income statements for both Garcon Company and Pepper Company. Garcon Com
ID: 2460134 • Letter: P
Question
Prepare income statements for both Garcon Company and Pepper Company.
Garcon Company Pepper Company Beginning finished goods inventory $ 14,400 $ 17,650 Beginning work in process inventory 18,900 21,000 Beginning raw materials inventory 8,000 11,100 Rental cost on factory equipment 29,250 23,350 Direct labor 19,800 37,000 Ending finished goods inventory 18,950 16,000 Ending work in process inventory 22,300 18,200 Ending raw materials inventory 5,400 7,800 Factory utilities 9,450 17,000 Factory supplies used 13,600 4,900 General and administrative expenses 24,500 44,500 Indirect labor 1,500 9,880 Repairs—Factory equipment 5,780 3,950 Raw materials purchases 39,000 60,000 Selling expenses 52,000 52,900 Sales 229,530 322,510 Cash 23,000 17,200 Factory equipment, net 247,500 124,825 Accounts receivable, net 16,400 23,450Prepare income statements for both Garcon Company and Pepper Company.
1-b. Prepare the current assets section of the balance sheet for each company.Explanation / Answer
REQ 1-A SCHEDULE OF COST OF PRODUCTION PARTICULARS GARCON PEPPER Beginning Inventory of raw material 8000 11100 Add: Beginning inventory of RM 39000 60000 Less: Ending inventory of Rm -5400 -7800 Raw material consumed 41,600 63300 Direct wages incurred 19,800 37000 Manufacturing overheads: Rental on Factory equipment 29250 23350 Factory utilities 9450 17000 Factory supplies 13600 4900 Indirect labour 1500 9880 Repairs 5780 3950 Total Mnaufacturing OH 59,580 59080 Total Manufacturing COST 120,980 159380 Add: Beginning Balance of Work in process 18,900 21000 Less: Ending Balance of Work in process -22,300 -18200 COST OF GOODS MANUFACTURED 117,580 162180 SCHEDULE OF COST OFGOODS SOLD PARTICULARS GARCON PEPPER Cost of Goods manufactured (as computed above) 117,580 162180 Add: Beginning inventory balance of Finished Goods 14,400 17650 Cost of Goods available for sale 131,980 179830 Less: Ending Inventory of Finished Goods 18,950 16000 COST OF GOODS SOLD 113,030 163830 STATEMENT OF INCOME PARTICULARS GARCON PEPPER Sales Revenue 229,530 322510 Less: Cost of Good sold (as computed above) 113,030 163830 Gross Margin 116,500 158680 Less: Expenses Selling expense 52,000 52900 General and admin expense 24,500 44500 Net Income earned during the period 40,000 61280 Req 1-b GARCON PEPPER CURRENT ASSETS Cash 23000 17200 Accounts Receivable 16400 23450 Raw material Inventory 5400 7800 Work in process inventory 22300 18200 Finished Goods inventory 18950 16000 TOTAL CURRENT ASSETS 86050 82650