Question

The following data is provided for Garcon Company and Pepper Company. Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory (direct materials) Rental cost on factory equipment Direct labor Ending finished goods inventory Ending work in process inventory Ending raw materials inventory Factory utilities Factory supplies used (indirect materials) General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net Garcon Company $ 13,000 16,800 10,600 34,750 21,000 20,600 22,900 7,600 9, 150 13,600 28,500 2,200 5,900 44,500 60,800 201,030 33,000 227,500 15,800 Pepper Company $ 16,300 22,500 9, 150 23,500 38.200 13, 100 21,400 7,600 15,000 5,800 46,000 8,380 3.000 62,500 47,500 312,510 18.200 145, 825 19,450 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 current asset section of the balance sheet for Pepper Company PEPPER COMPANY Partial Balance Sheet As of December 31, 2019 Inventories: Total current assets

Answer 1

1) Income Statement
	Garcon Company	Pepper Company
Sales	$201,030	$312,510
Less: Cost of Goods Sold	($120,400)	($162,230)
Gross Margin	$80,630	$150,280
Less: Operating expenses:
General and administrative expenses	($28,500)	($46,000)
Selling expenses	($60,800)	($47,500)
Net Operating Income	($8,670)	$56,780
Working notes:
Beginning raw materials inventory (direct materials)	$10,600	$9,150
Add: Raw materials purchases	$44,500	$62,500
Total Raw Materials Available	$55,100	$71,650
Less: Ending raw materials inventory (direct materials)	($7,600)	($7,600)
Total Raw Materials Used	$47,500	$64,050
Add: Direct Labor	$21,000	$38,200
Add: Rental cost on factory equipment	$34,750	$23,500
Add: Factory utilities	$9,150	$15,000
Add: Factory supplies used (indirect materials)	$13,600	$5,800
Add: Indirect labor	$2,200	$8,380
Add: Repairs-Factory equipment	$5,900	$3,000
Total Manufacturing Costs	$134,100	$157,930
Add: Beginning work-in process inventory	$16,800	$22,500
Less: Ending work-in process inventory	($22,900)	($21,400)
Cost of Goods Manufactured	$128,000	$159,030
Add: Beginning finished goods inventory	$13,000	$16,300
Less: Ending finished goods inventory	($20,600)	($13,100)
Cost of Goods Sold	$120,400	$162,230

2-a) Partial Balance Sheet
GARCON COMPANY
Partial Balance Sheet
As of December 31, 2019
Cash		$33,000
Accounts receivable, net		$15,800
Inventories:
Ending finished goods inventory	$20,600
Ending work-in process inventory	$22,900
Ending raw materials inventory	$7,600	$51,100
Factory utilities		$9,150
Total Current Assets		$109,050
2-b) Partial Balance Sheet
PEPPER COMPANY
As of December 31, 2019
Cash		$18,200
Accounts receivable, net		$19,450
Inventories:
Ending finished goods inventory	$13,100
Ending work-in process inventory	$21,400
Ending raw materials inventory	$7,600	$42,100
Factory utilities		$15,000
Total Current Assets		$94,750