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: 272,500 Ibs. @ $1.80/lb	$	490,500
No. 2: 272,500 Ibs. @ $1.40/lb				$	381,500
No. 3: 872,000 Ibs. @ $0.25/lb							$	218,000
Total sales											$	1,090,000
Costs
Tree pruning and care @ $0.50/Ib		136,250			136,250			436,000				708,500
Picking, sorting, and grading @ $0.10/Ib		27,250			27,250			87,200				141,700
Delivery costs		16,600			16,600			39,000				72,200
Total costs		180,100			180,100			562,200				922,400
Net income (loss)	$	310,400		$	201,400		$	(344,200	)		$	167,600

In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The companys delivery cost records show that $33,200 of the $72,200 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,000 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