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: 360,000 Ibs. @ $1.20/lb	$	432,000
No. 2: 360,000 Ibs. @ $0.80/lb				$	288,000
No. 3: 1,200,000 Ibs. @ $0.15/lb							$	180,000
Total sales											$	900,000
Costs
Tree pruning and care @ $0.20/Ib		72,000			72,000			240,000				384,000
Picking, sorting, and grading @ $0.08/Ib		28,800			28,800			96,000				153,600
Delivery costs		16,400			16,400			38,900				71,700
Total costs		117,200			117,200			374,900				609,300
Net income (loss)	$	314,800		$	170,800		$	(194,900	)		$	290,700

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 $32,800 of the $71,700 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,900 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery.

Problem 24-5AB Part 2

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.)