Question

Required information [The following information applies to the questions displayed below.) The following data is provided for Garcon Company and Pepper Company. Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory (direct materials) 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 (indirect materials) General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net Garcon Company $ 13,300 18, 200 8, 100 33,500 19, 200 21,950 27,700 7,000 9,900 13,600 29,500 1,400 7,460 35,000 63,600 232,530 30,000 252,500 16,600 Pepper Company $ 17,800 19,800 9,300 22,450 39,800 14,700 20,000 8,000 12,750 4,300 46,000 9,820 3,250 66,000 46,600 330, 010 18,700 115, 825 21, 200

Answer 1

solution: Part 1: GARCON COMPANY PEPPER COMPANY Direct material: Beginning raw materials inventory Add: Raw material purchases Raw material available for use Less: Ending raw materials inventory Raw materials used in production Direct Labor 8100 9300 35000 66000 43100 75300 7000 8000 36100 67300 19200 39800 Factory overhead Rental cost of factory equipment Factory utilities Factory supplies used Indirect labor Repair - factory equipment Total Factory overhead Total manufacturing costs Add :Beginning work in process inventory sub total Deduct : Ending work in process inventory 33500 22450 12750 9900 13600 4300 1400 9820 7460 3250 65860 52570 121160 159670 18200 19800 179470 139360 20000 27700 Cost of goods manufactured 159470 111660 Part 2: GARCON COMPANY PEPPER COMPANY Beginning finished goods inventory Add : Cost of goods manufactured Cost of Goods available for sale Deduct: Ending finished goods inventory 13300 17800 111660 159470 124960 177270 21950 14700 Cost of goods sold 103010 162570

Part 3: GARCON COMPANY Income statement For the year ended December 31,2019 Sales 232530 Less : cost of goods sold Gross profit Operating expenses General and Administrative expenses 103010 129520 29500 selling expense 63600 Income (loss) before tax 36420 PEPPER COMPANY Income statement For the year ended December 31,2019 Sales 330010 Less : cost of goods sold Gross profit Operating expenses General and Administrative expenses 162570 167440 46000 selling expense 46600 Income (loss) before tax 74840

Part 4: PEPPER COMPANY Partial Balance Sheet As of December 31,2019 GARCON COMPANY Partial Balance Sheet As of December 31,2019 Cash Cash 18700 30000 Account recievable, net Inventories Account recievable, net Inventories Raw material Inventory Work in process Inventory 20000 Finished goods Inventory 21200 16600 Raw material Inventory 7000 8000 Work in process Inventory Finished goods Inventory 27700 14700 21950 56650 42700 Total current assets Total current assets 1E+05 82600

Part 5: Garcon Company Pepper Company Direct material: Beginning raw materials inventory Add: Raw material purchases Raw material available for use 8100 9300 35000 66000 43100 75300 Less: Ending raw materials inventory 7000 8000 Raw materials used in production Direct Labor Total prime costs 67300 36100 19200 39800 55300 107100 Part 6: Garcon Company Pepper Company Direct Labor Factory overhead Rental cost of factory equipment Factory utilities Factory supplies used Indirect labor Repair - factory equipment Total Factory overhead Total conversion costs 19200 39800 33500 22450 9900 12750 4300 13600 1400 9820 7460 3250 65860 52570 150920 144940