The following data is provided for Garcon Company and Pepper Company. Garcon Company Pepper Company Beginning finished goods inventory $ 14,500 $ 18,250 Beginning work in process inventory 18,200 22,650 Beginning raw materials inventory (direct materials) 9,600 14,400 Rental cost on factory equipment 33,750 23,350 Direct labor 22,600 43,400 Ending finished goods inventory 21,500 15,300 Ending work in process inventory 25,300 21,400 Ending raw materials inventory 7,300 7,400 Factory utilities 11,850 17,500 Factory supplies used (indirect materials) 13,300 5,400 General and administrative expenses 29,500 53,500 Indirect labor 1,950 7,720 Repairs—Factory equipment 5,180 3,800 Raw materials purchases 39,000 53,500 Selling expenses 58,400 49,900 Sales 225,030 317,510 Cash 25,000 20,200 Factory equipment, net 242,500 160,825 Accounts receivable, net 16,400 20,450 Required: 1. Prepare income statements for both Garcon Company and Pepper Company. 2. Prepare the current assets section of the balance sheet for each company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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

	Garcon Company		Pepper Company
Beginning finished goods inventory		$	14,500	$	18,250
Beginning work in process inventory			18,200		22,650
Beginning raw materials inventory (direct materials)			9,600		14,400
Rental cost on factory equipment			33,750		23,350
Direct labor			22,600		43,400
Ending finished goods inventory			21,500		15,300
Ending work in process inventory			25,300		21,400
Ending raw materials inventory			7,300		7,400
Factory utilities			11,850		17,500
Factory supplies used (indirect materials)			13,300		5,400
General and administrative expenses			29,500		53,500
Indirect labor			1,950		7,720
Repairs—Factory equipment			5,180		3,800
Raw materials purchases			39,000		53,500
Selling expenses			58,400		49,900
Sales			225,030		317,510
Cash			25,000		20,200
Factory equipment, net			242,500		160,825
Accounts receivable, net			16,400		20,450

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

Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper
Prepare the income statement for Garcon Company.
GARCON COMPANY
Income Statement
For Year Ended December 31, 2019
Gross profit
Operating expenses
Income (loss) before tax
2$
Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper
Prepare the income statement for Pepper Company.
PEPPER COMPANY
Income Statement
For Year Ended December 31, 2019
5.
Operating expenses
Income (loss) before tax
$

Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper
Prepare the current asset section of the balance sheet for Garcon
GARCON COMPANY
Partial Balance Sheet
As of December 31, 2019
Inventories:
Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper
Prepare the current asset section of the balance sheet for Pepper Company.
PEPPER COMPANY
Partial Balance Sheet
As of December 31, 2019
Inventories:
Total current assets
24

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