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 Ibs. @ $1.80/lb				$	367,200
No. 3: 1,360,000 Ibs. @ $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 companys 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.)