Exercise 1-9 Prepare financial statements for a manufacturer LO C4, P2 Using the
ID: 400182 • Letter: E
Question
Exercise 1-9 Prepare financial statements for a manufacturer LO C4, P2 Using the following data Garcon Pepper Company Company $ 14,600 15,300 9,000 32,750 19,800 18,500 25,000 6,200 13,650 11,500 32,500 2,500 5,180 48,000 55,200 217,530 32,000 247,500 15,400 $ 17,650 Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory 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 General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net 20,850 11,100 24,700 39,800 15,900 21,400 7,800 12,000 5,600 44,000 9,580 2,700 67,500 49,600 305,010 20,200 133,825 21,200Explanation / Answer
Answer -1(a)
In order to prepare income statement,below mentioned categorisation has been done
Heading
Inclusion
Revenue
Sales +accounts receivable
Cost of good sold
Direct labor +Factory supply used+Raw material supply
Gross profit
Revenue - COGS
Operating expense
Rental cost on factory equipment
General & admin expense
Indirect labor
Repair-factory equipment
Selling expense
Factory utilities
**Please note that all values mentioned here are in USD
Income statement for GARCON company:
GARCON Company
Income statement
For year ended December 31,2015
Revenue
262,900
Cost of Goods solved
79,300
Gross Profit
183,600
Operating expense:
Rental cost of factory equipment
32750
General and admin expense
32500
Indirect labor
2500
Repair-factory equipment
5180
Selling expense
55200
Factory utilities
13650
Income before taxes
41820
Income statement for PEPPER company:
PEPPER Company
Income statement
For year ended December 31,2015
Revenue
326,210
Cost of Goods solved
112900
Gross Profit
213310
Operating expense:
Rental cost of factory equipment
24700
General and admin expense
44000
Indirect labor
9580
Repair-factory equipment
2700
Selling expense
49600
Factory utilities
12000
Income before taxes
70,730
Answer -1(b)
Current asset section for GRACON is as below
GARCON COMPANY
Partial Balance Sheet
As of December 31,2015
Cash
32,000
Accounts receivables
15,400
Inventories
Finished Goods
18,500
Work in process
25,000
Raw Material
6,200
49,700
Total current assets
97,100
Current asset sheet for PEPPER company is as below
PEPPER COMPANY
Partial Balance Sheet
As of December 31,2015
Cash
20,200
Accounts receivables
21,200
Inventories
Finished Goods
15,900
Work in process
21,400
Raw Material
7,800
45,100
Total current assets
87,100
Heading
Inclusion
Revenue
Sales +accounts receivable
Cost of good sold
Direct labor +Factory supply used+Raw material supply
Gross profit
Revenue - COGS
Operating expense
Rental cost on factory equipment
General & admin expense
Indirect labor
Repair-factory equipment
Selling expense
Factory utilities
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