Question

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The following data is provided for Garcon Company and Pepper Company.

	Garcon Company					Pepper Company
Beginning finished goods inventory		$	12,300			$	17,800
Beginning work in process inventory			17,700				19,800
Beginning raw materials inventory			7,800				12,900
Rental cost on factory equipment			33,250				26,800
Direct labor			20,200				37,800
Ending finished goods inventory			17,900				16,800
Ending work in process inventory			22,300				18,600
Ending raw materials inventory			5,800				9,600
Factory utilities			10,650				14,000
Factory supplies used			13,300				3,300
General and administrative expenses			23,500				50,500
Indirect labor			1,350				9,580
Repairs—Factory equipment			4,820				3,650
Raw materials purchases			43,000				54,500
Selling expenses			58,400				56,200
Sales			217,530				345,010
Cash			23,000				22,700
Factory equipment, net			222,500				121,825
Accounts receivable, net			13,800				19,950

Required:
1-a. Prepare income statements for both Garcon Company and Pepper Company.
1-b. Prepare the current assets section of the balance sheet for each company.

Prepare the income statement for Garcon Company.

REQ 1A:

	GARCON COMPANY Income Statement For Year Ended December 31, 2017 Sales Less: Cost of goods sold Gross profit 0 Operating expenses Selling expenses General and administrative expenses Income (loss) before tax $0

REQ 1A: Prepare the income statement for Pepper Company.

	PEPPER COMPANY Income Statement For Year Ended December 31, 2017 0 Operating expenses Income (loss) before tax $0

Prepare the current asset section of the balance sheet for Garcon Company.

REQ 1B:

	GARCON COMPANY Partial Balance Sheet As of December 31, 2017 Cash Accounts receivable, net Inventories: Raw materials inventory Work in process inventory Finished goods inventory 0 Total current assets $0

Prepare the current asset section of the balance sheet for Pepper Company.

REQ 1 B: Pepper

	PEPPER COMPANY Partial Balance Sheet As of December 31, 2017 Inventories: 0 Total current assets $0

Answer 1

		Garcon company		Peppar company
	Schedule for manufacturing cost
	beginning raw material	7800		12900
Add	Purchase of raw material	43000		54500
	Total	50800		67400
Less	Ending Raw material	5800		9600
	Raw material used in production		45000		57800
Add	Direct labor		20200		37800
	Prime cost		65200		95600
Add	Manufacturing cost
	Indirect labor	1350		9580
	Rent on factory equipment	33250		26800
	Factory utilities	10650		14000
	Factory supplies used	13300		3300
	Repair factory equipment	4820	63370	3650	57330
	Total manufacturing cost		128570		152930
Add	Beginning work in progress		17700		19800
			146270		172730
less	Ending work in progress		22300		18600
	Cost of goods manufactured		123970		154130
Add	Beginning finished goods inventory		12300		17800
	Cost of goods available for sale		136270		171930
less	Ending finished goods inventory		17900		16800
	Cost of goods sold		118370		155130
	Income statement
	Sales		217530		345010
Less	Cost of goods sold		118370		155130
	Gross profit		99160		189880
Less	Expense
	General and admin expense	23500		50500
	Selling expense	58400	81900	56200	106700
	Net income		17260		83180
	Partial balance sheet	Garcon company
	Current assets
	Inventory
	Raw material	5800
	Work in progress	22300
	Finished goods	17900
	Total inventory		46000
	Cash		23000
	Accounts receivable net		13800
	Total current assets		82800
	Partial balance sheet	Peppar company
	Current assets
	Inventory
	Raw material	9600
	Work in progress	18600
	Finished goods	16800
	Total inventory		45000
	Cash		22700
	Accounts receivable net		19950
	Total current assets		87650