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Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on
Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on its No. 3 peaches. GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2017 No. 1 No. 2 No. 3 Combined Sales (by grade) No. 1: 204,000 Ibs. @ $2.20/lb $448, 800 No. 2: 204,000 lbs. @ $1.80/lb $367,200 No. 3: 1,360,000 lbs. @ $0.15/lb $ 204,000 Total sales $1,020,000 Costs Tree pruning and care @ $0.35/Ib 71,400 71,400 476,000 618, 800 Picking, sorting, and grading @ $0.10/Ib 20,400 20,400 136,000 176, 800 Delivery costs 15,400 15,400 37,900 68, 700 Total costs 107,200 107, 200 649,900 864,300 Net income (loss) $341, 600 $260,000 $(445, 900) $ 155,700 In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The company's delivery cost records show that $30,800 of the $68,700 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $37,900 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery. 2. Using your answers to part 1, prepare an income statement using the joint costs allocated on a sales value basis. (Do not round intermediate calculations.) GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2018 No. 1 No. 2 No. 3 Combined Costs Total costs 0 0 0 0 $ 0 $ 0 $ 0 $ 0
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