To prepare:
Income statement for −

Answer to Problem 9E
Solution:
Garcon Company | |||
Income Statement | |||
For the Year Ended December 31, 2015 | |||
Sales | 195,030 | ||
Less: Cost of Goods sold | 91,030 | ||
Gross profit | 104,000 | ||
Less: Selling and Administrative Expenses | |||
General and administrative expenses | 21,000 | ||
Selling expenses | 50,000 | ||
Total selling and administrative expenses | 71,000 | ||
Operating Income | 33,000 |
Explanation of Solution
Explanation The income statement for Garcon Company has been prepared using the information given.
The income statement of Garcon Company has been prepared.
Pepper Company | |||
Income Statement | |||
For the Year Ended December 31, 2015 | |||
Sales | 290,010 | ||
Less: Cost of Goods sold | 143,010 | ||
Gross profit | 147,000 | ||
Less: Selling and Administrative Expenses | |||
General and administrative expenses | 43,000 | ||
Selling expenses | 46,000 | ||
Total selling and administrative expenses | 89,000 | ||
Operating Income | 58,000 |
Explanation:
The income statement for Garcon Company has been prepared using the information given.
The income statement of Pepper Company has been prepared.
Thus, the income statements for Garcon Company and Pepper Company have been prepared.
Requirement 2
To prepare:
Current assets section for −
Requirement 2

Answer to Problem 9E
Solution:
Garcon Company | |||
For the Year Ended December 31, 2015 | |||
Current Assets | |||
Cash | 20,000 | ||
13,200 | |||
Inventory | |||
Raw material − Ending | 5,300 | ||
Work in process − Ending | 22,000 | ||
Finished gods − Ending | 17,650 | ||
44,950 | |||
Total current assets | 78,150 |
Explanation of Solution
The current assets section includes all the current assets of the company. The current assets given in the information are −
Pepper Company | |||
Balance sheet | |||
For the Year Ended December 31, 2015 | |||
Current Assets | |||
Cash | 15,700 | ||
Accounts Receivables, net | 19,450 | ||
Inventory | |||
Raw material − Ending | 7,200 | ||
Work in process − Ending | 16,000 | ||
Finished gods − Ending | 13,300 | ||
36,500 | |||
Total current assets | 71,650 |
Explanation:
The current assets section includes all the current assets of the company. The current assets given in the information are −
Thus, the current assets section for both the companies have been prepared.
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Chapter 18 Solutions
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