Question

1. Prepare income statements for both Garcon Company and Pepper Company 2. Prepare the current assets section of the balance sheet for each company.

Required information [The following information applies to the questions displayed below.) 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 $ 12,000 14,500 7,250 27,000 19,000 17,650 22,000 5,300 9,000 8,200 21,000 1,250 4,780 33,000 50,000 195,030 20,000 212,500 13,200 Pepper Company $ 16,450 19,950 9,000 22,750 35,000 13,300 16,000 7,200 12,000 3,200 43,000 7,660 1,500 52,000 46,000 290,010 15,700 115,825 19,450

Answer 1

Answer :-

1

Garcon Company
Income Statement
For the year ended December 31,2019
Particular	Amount $	Amount $
Sales	195,030
less:Cost of goods sold (Note -1)	91,030
Gross Profit		104,000
Less: Operating expense:
General & administrative expense	21,000
Selling expense	50,000	71,000
Income (Loss) before tax		33,000
Pepper Company
Income Statement
For the year ended December 31,2019
Particular	Amount $	Amount $
Sales	290,010
less:Cost of goods sold(Note -1)	143,010
Gross Profit		147,000
Less: Operating expense:
General & administrative expense	43,000
Selling expense	46,000	89,000
Income before tax		58,000

Note - 1:-

We will find Cost of good sold for both Garcon and pepper company

	Garcon Company	Pepper Company
Beginning Raw Materials Inventory	$7,250	$9,000
Add: Raw materials purchase	$33,000	$52,000
Total Raw Materials for use	$40,250	$61,000
Less :- Ending Raw materials	$5,300	$7,200
Direct materials Used	$34,950	$53,800
Direct Labor	$19,000	$35,000
Factory Overhead :-
Indirect Labor	$1,250	$7,660
Factory Supplies Used	$8,200	$3,200
Factory Utilities	$9,000	$12,000
Rental Cost on Factory Equipment	$27,000	$22,750
Repairs-Factory Equipment	$4,780	$1,500
Total Factory Overhead	$50,230	$47,110
Total Manufacturing Costs (Total Factory Overhead + Direct Materials Used + Direct Labor)	$104,180	$135,910
Add: Beginning work in process inventory	$14,500	$19,950
Less :- Ending Work in process inventory	$22,000	$16,000
Cost of Goods manufactured	$98,680	$139,860
Add:-Beginning Finished Goods Inventory	$12,000	$16,450
Costs of goods available for sale	$108,680	$156,310
Less:-Ending Finished Goods Inventory	$17,650	$13,300
Cost of good sold	$91,030	$143,010

2)

Garcon company
Partial Balance Sheet
Cash		$20,000
Accounts receivable,net		$13,200
Invetories
Raw Materials inventory	$5,300
Work in process inventory	$22,000
Finished goods inventory	$17,650	$44,950
Total current assets		$78,150

.

Pepper company
Partial Balance Sheet
Cash		$15,700
Accounts receivable,net		$19,450
Invetories
Raw Materials inventory	$7,200
Work in process inventory	$16,000
Finished goods inventory	$13,300	$36,500
Total current assets		$71,650