Question

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 $ 13,600 15,700 7,900 30, 250 23,400 18, 350 25, 300 7,200 9,600 9,700 30,500 1,950 7, 700 44,500 52,400 214,530 25,000 237, 500 14,200 Pepper Company $ 16,900 22,950 12,150 25,600 40,200 14,900 19,800 8,600 17,750 5,200 45,000 8,500 2,750 52,500 48, 400 312, 510 22, 700 142,825 22,450

Answer 1

Cost of Goods Manufactured

	Garcon Company	Pepper Company
Direct Material:
Beginning Inventory of Raw Material	$7900	$12150
ADD - Material Purchased	$44500	$52500
Raw material Available for use	$52400	$64650
LESS - Ending inventory of Raw Material	$7200	$8600
Direct Material used	$45200	$56050
Direct Labour	$23400	$40200
Manufacturing Overhead:
Rental cost on factory equipment	$30250	$25600
Factory Utilities	$9600	$17750
Factory suppliies used	$9700	$5200
Indirect Labor	$1950	$8500
Repair factory equipment	$7700	$2750
Total Manufacturing Overhead	$59200	$59800
Total Manufacturing cost	$127800	$156050
ADD - Beginning work in process	$15700	$22950
Total Cost of work in process	$143500	$179000
LESS - Ending Work in process	$25300	$19800
Cost of Goods Manufactured	$118200	$159200

Total Manufacturing cost = Direct material used + Direct Labor + Total manufacturing overhead

Cost of Goods Sold

	Garcon Company	Pepper Company
Beginning Inventory Finished Goods	$13600	$16900
ADD - Cost of goods manufacutred	$118200	$159200
Cost of goods available for sale	$131800	$176100
LESS - Ending Inventory of Finished Goods	$18350	$14900
Cost of Goods Sold	$113450	$161200

1) Income Statement

	Garcon Company	Pepper Company
Sales Revenue	$214530	$312510
LESS - Cost of Goods Sold	$113450	$161200
Gross Profit	$101080	$151310
Operating Expenses:-
General & Administrative Expense	$30500	$45000
Selling Expense	$52400	$48400
LESS - Total Operating Expense	$82900	$93400
Income Before Tax	$18180	$57910

Total Operating Expenses = General & Adminstrative Expense + Selling Expense

2) Partial Balance Sheet (Current Assets)

	GARCON COMPANY	PEPPER COMPANY
Current Assets
Cash	$25000	$22700
Accounts Receivable	$14200	$22450
Inventories:-
Ending Raw Material inventory	$7200	$8600
Ending Work in Process inventory	$25300	$19800
Ending Finished goods inventory	$18350	$14900
Total Current Assets	$90050	$88450

Factory Equipment is a fixed asset.