Question

PART 3) The following data is provided for Garcon Company and Pepper Company Garcon Company Pepper Company Beginning finished goods inventory $ 14,200 $ 19,150 Beginning work in process inventory 16,900 22,500 Beginning raw materials inventory 9,700 13,950 Rental cost on factory equipment 32,750 22,900 Direct labor 21,400 43,000 Ending finished goods inventory 18,650 14,000 Ending work in process inventory 26,800 19,400 Ending raw materials inventory 7,300 7,600 Factory utilities 14,250 16,500 Factory supplies used 12,700 6,000 General and administrative expenses 32,500 59,500 Indirect labor 2,450 9,340 Repairs—Factory equipment 5,660 1,700 Raw materials purchases 35,500 55,500 Selling expenses 59,600 46,000 Sales 214,530 307,510 Cash 21,000 18,200 Factory equipment, net 262,500 163,825 Accounts receivable, net 14,800 24,950 3A) Prepare income statements for both Garcon Company and Pepper Company. Garcon Company Income Statement For Year December 31, 2017                                                                         Operating Expenses                                                                                          Income (loss) Before Tax $ Pepper Company Income Statement For Year December 31, 2017                                                                         Operating Expenses                                                                                          Income (loss) Before Tax $ 3B) Prepare the current assets section of the balance sheet for each company. Garcon Company Partial Balance Sheet For Year December 31, 2017                                  Inventories:                                                                                                                    Total Current Assets $

Pepper Company Partial Balance Sheet For Year December 31, 2017
Inventories:
Total Current Assets		$

Answer 1

	Garcon Company	Pepper Company
Direct materials
Beginning raw material inventory	$                        9,700	$                      13,950
Add: Raw materials purchased	$                      35,500	$                      55,500
Raw material available for use	$                      45,200	$                      69,450
Less: Ending raw material inventory	$                        7,300	$                         7,600
Direct material used	$                      37,900	$                      61,850
Direct labor	$                      21,400	$                      43,000
Factory overhead
Factory utilities	$                      14,250	$                      16,500
Rental cost on factory equipment	$                      32,750	$                      22,900
Factory supplies used	$                      12,700	$                         6,000
Indirect labor	$                        2,450	$                         9,340
Repairs - Factory equipment	$                        5,660	$                         1,700
Total manufacturing cost	$                   127,110	$                    161,290
Add: Beginning work in process inventory	$                      16,900	$                      22,500
Total cost of work in process	$                   144,010	$                    183,790
Less: Ending work in process inventory	$                      26,800	$                      19,400
Cost of goods manufactured	$                   117,210	$                    164,390
	Garcon Company	Pepper Company
Cost of goods manufactured	$                   117,210	$                    164,390
Add: Beginning finished goods inventory	$                      14,200	$                      19,150
Cost of goods available for sale	$                   131,410	$                    183,540
Less: Ending finished goods inventory	$                      18,650	$                      14,000
Cost of goods sold	$                   112,760	$                    169,540

Garcon Company
Income Statement
For Year December 31, 2017
Sales		$ 214,530
Less: Cost of goods sold		$ 112,760
Gross profit		$ 101,770
Operating expenses
General and administrative expense	$ 32,500
Selling expense	$ 59,600
Total operating expense		$    92,100
income (loss) before tax		$      9,670

Pepper Company
Income Statement
For Year December 31, 2017
Sales		$ 307,510
Less: Cost of goods sold		$ 169,540
Gross profit		$ 137,970
Operating expenses
General and administrative expense	$ 59,500
Selling expense	$ 46,000
Total operating expense		$ 105,500
income (loss) before tax		$    32,470

Garcon Company
Balance Sheet (partial)
As at December 31, 2017
Cash	$ 21,000
Accounts receivable	$ 14,800
Inventories:
Finished goods inventory	$ 18,650
Work in process inventory	$ 26,800
Raw material inventory	$    7,300
Total current assets		$ 88,550

Pepper Company
Balance Sheet (partial)
As at December 31, 2017
Cash	$ 18,200
Accounts receivable	$ 24,950
Inventories:
Finished goods inventory	$ 14,000
Work in process inventory	$ 19,400
Raw material inventory	$    7,600
Total current assets		$    84,150