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 $ 13,800 15,300 7,800 34,250 24,400 17,450 24,700 7,700 10,050 9,700 33,000 1,500 5,420 43,000 61,200 219,030 27,000 222,500 15, 200 Pepper Company $ 16,150 19,950 10,200 22,000 38,200 14,200 21,800 9,400 16,750 5,400 56,500 7,780 2,350 62,000 55,300 300,010 19,700 160, 825 20,200

Answer 1

GARCON COMPANY Income Statement For Year Ended December 31, 2019
Sales	$ 219,030
Less: Cost of goods sold	($ 115,370)
Gross profit	$ 103,660
Less: Operating expenses
- Selling expenses	($ 61,200 )
- General and administrative expenses	($ 33,000)
Total Operating expenses	($ 94,200 )
Income (loss) before tax	$ 9,460
PEPPER COMPANY Income Statement For Year Ended December 31, 2019
Sales	$ 300,010
Less: Cost of goods sold	($ 155,380)
Gross profit	$ 144,630
Less: Operating expenses
- Selling expenses	($ 55,300)
- General and administrative expenses	($ 56,500)
Total Operating expenses	($ 111,800)
Income (loss) before tax	$ 32,830

GARCON COMPANY Partial Balance Sheet As of December 31, 2019
Cash		$ 27,000
Accounts receivable		$ 15,200
Inventories :
Finished goods	$ 17,450
Work in Process	$ 24,700
Raw materials	$ 7,700	$ 49,850
Total Current assets		$ 92,050

PEPPER COMPANY Partial Balance Sheet As of December 31, 2019
Cash		$ 19,700
Accounts receivable		$ 20,200
Inventories :
Finished goods	$ 14,200
Work in Process	$ 21,800
Raw materials	$ 9,400	$ 45,400
Total Current assets		$ 85,300

Workings :
	Garcon Company	Pepper Company
Direct materials :
Beginning raw materials inventory	$ 7,800	$ 10,200
Add: Raw materials Purchases	$ 43,000	$ 62,000
Raw materials available for use	$ 50,800	$ 72,200
Less: Ending raw materials inventory	($ 7,700)	($ 9,400 )
Direct materials used   (1)	$ 43,100	$ 62,800
Direct labor (2)	$ 24,400	$ 38,200
Factory overhead :
- Rental cost on factory equipment	$ 34,250	$ 22,000
- Factory utilities	$ 10,050	$ 16,750
- Factory supplies used	$ 9,700	$ 5,400
- Indirect labor	$ 1,500	$ 7,780
- Repairs factory equipment	$ 5,420	$ 2,350
Total Factory overhead   (3 )	$ 60,920	$ 54,280
Total Manufacturing cost    ( 1 + 2 +3 )	$ 128,420	$ 155,280
Add: Beginning work in progress inventory	$ 15,300	$ 19,950
Total cost of work in process	$ 143,720	$ 175,230
Less: Ending work in progress inventory	($ 24,700)	($ 21,800)
Cost of goods manufactured	$ 119,020	$ 153,430
2)
	Garcon Company	Pepper Company
Beginning Finished goods Inventory	$ 13,800	$ 16,150
Add: Cost of goods manufactured	$ 119,020	$ 153,430
Cost of goods available for sale	$ 132,820	$ 169,580
Less: Ending finished goods Inventory	($ 17,450 )	($ 14,200)
Cost of goods sold	$ 115,370	$ 155,380