Question

Required information (The following information applies to the questions displayed below.] The following data is provided for Garcon Company and Pepper Company. Garcon Pepper Company $ 13,800 16,400 Company %$4 19,300 20,400 Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory (direct materials) Rental cost on factory equipment Direct labor 8,400 14,850 32,000 21,200 19,400 26,200 39,000 Ending finished goods inventory Ending work in process inventory Ending raw materials inventory Factory utilities Factory supplies used (indirect materials) General and administrative expenses 15,600 21,800 10,e00 18,000 25,900 7,900 11,850 10,600 4,000 21,500 46,e00 Indirect labor 1,800 5,180 9,940 3,200 54,000 58,600 342,510 Repairs-Factory equipment Raw materials purchases Selling expenses Sales 33,500 62,800 211,530 29,000 Cash 19,700 133,825 20,450 Factory equipment, net Accounts receivable, net 262,500 15,600 Required: 1. Prepare income statements for both Garcon Company and Pepper Company. 2. Prepare the current assets section of the balance sheet for each company. Complete this question by entering your answers in the tabs below. Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper Prepare the income statement for Garcon Company. GARCON COMPANY Income Statement For Year Ended December 31, 2019

Answer 1

1)A	GARCON COMPANY
	Income Statement
	For year Ended December 31,2019
	Sales	$ 211,530
	Less: Cost of goods sold ( see note 1)	($101,530)
	Gross profit	$ 110,000
	Less: Operating expenses :
	General and administrative expenses	$ 21,500
	Selling expenses	$62,800
		($ 84,300 )
	Income(loss) before tax	$ 25,700
	($ 110,000 - $ 84,300 )

1)B	PEPPER COMPANY
	Income Statement
	For year Ended December 31,2019
	Sales	$ 342,510
	Less: Cost of goods sold ( see note 1)	($ 161,490)
	Gross profit	$ 181,020
	Operating expenses :
	General and administrative expenses	$46,000
	Selling expenses	$ 58,600
		($104,600)
	Income(loss) before tax	$ 76,420
	($181,020 -$ 104,600 )

NOTE 1 :

Calculate the cost of goods sold for Garcon company and Pepper company :
	GARCON COMPANY	PEPPER COMPANY
Direct materials :
Beginning raw materials inventory	$ 8,400	$ 14,850
Add : Raw materials purchases	$ 33,500	$ 54,000
Raw materials available for use	$ 41,900	$ 68,850
Less: Ending raw materials inventory	($7,900 )	($10,000)
Direct materials used	$ 34,000	$ 58,850
Direct labor	$ 21,200	$ 39,000
A)	$ 55,200	$ 97,850
Factory overhead :
Indirect labor	$ 1,800	$ 9,940
Factory supplies used	$ 10,600	$ 4,000
Factory utilities	$ 11,850	$ 18,000
Rental cost on factory equipment	$ 32,000	$ 26,200
Repairs -factory equipment	$ 5,180	$ 3,200
Total factory overhead (B )	$ 61,430	$ 61,340
Total manufacturing costs C= ( A+B)	$ 116,630	$ 159,190
Add: Beginning work in process inventory	$ 16,400	$ 20,400
Total cost of work in process	$ 133,030	$ 179,590
Less: Ending work in process inventory	($ 25,900 )	( $ 21,800 )
Cost of goods manufactured	$ 107,130	$ 157,790
Add: Beginning finished goods inventory	$ 13,800	$ 19,300
Cost of goods available for sale	$ 120,930	$ 177,090
Less: Ending finished goods inventory	($19,400)	($15,600)
Cost of goods sold	$ 101,530	$ 161,490

2)A	GARCON COMPANY
	Partial Balance Sheet
	AS of December 31,2019
	Cash		$ 29,000
	Accounts receivable		$ 15,600
	Inventories :
	Raw materials inventory	$ 7,900
	Work in process inventory	$ 25,900
	Finished goods inventory	$ 19,400
			$ 53,200
	Total current assets		$ 97,800

3)B	PEPPER COMPANY
	Partial Balance Sheet
	AS of December 31,2019
	Cash		$ 19,700
	Accounts receivable		$ 20,450
	Inventories :
	Raw materials inventory	$ 10,000
	Work in process inventory	$ 21,800
	Finished goods inventory	$ 15,600
			$ 47,400
	Total current assets		$ 87,550