Management of Great Springs Bottles Water Company has asked you, the controller. To the develop a transfer pricing system for the company. The transportation department of the company sells all of its products to the bottling department of the company. Thus the transportation departments sales become the bottling departments cost of good sold. In order to determine an optional transfer pricing system, management would like you to demonstrate what an income statement would look like under a cost, market, and negotiated transfer pricing structure. These various transfer prices are listed below
Great Springs Bottled Water Company Income Statement (Cost-based) Month Ending August 31, 20xx Expenses: Fuel/utility expense Wages expense Costs allocated from corporate Total expenses Operating income/(loss) in dollars Operating income/(loss) in percentage \begin{tabular}{cc} $14,000 & $3,100 \\ 43,100 & $7,300 \\ 17,235 & 14,000 \\ \hline$74,335 & $74,400 \\ \hline$% \end{tabular} Great Springs Bottled Water Company Income Statement (Market-based) Month Ending August 31, 20xx \begin{tabular}{lcc} \hline & Transportation & Bottling \\ \hline Sales & $+8,087,000 \\ Cost of goods sold & & \\ Gross profit & & \end{tabular} Expenses: Fuel/utility expense Wages expense $14,00043,10097,235$3,10057,300innnn Income Statement (Market-based) Month Ending August 31, 20xx \begin{tabular}{ll} \hline & Transportation \\ \hline Sales \\ Cost of goods sold \\ Gross profit \end{tabular} Expenses: Fuel/utility expense Wages expense Costs allocated from corporate Total expenses Operating income/(loss) in dollars Operating income/(loss) in percentage \begin{tabular}{cc} $14,000 & $3,100 \\ 43,100 & 57,300 \\ 17,235 & 14,000 \\ \hline$74,335 & $74,400 \\ \hline$% \end{tabular} Great Springs Bottled Water Company Income Statement (Negotiated) Month Ending August 31, 20xx \begin{tabular}{lcc} \hline & Transportation & Bottling \\ \hline Sales & $287,000 \\ Cost of goods sold & Gross profit & \end{tabular} Expenses: Fuel/utility expense \begin{tabular}{cc} $14,000 & $3,100 \\ 43,100 & 57,300 \\ 17,235 & 14,000 \\ \hline A7, 77e & A7A AN \end{tabular} Check My Work Great Springs Bottled Water Company Income Statement (Negotiated) Management of Great Springs Bottled Water Company has asked you, the controller, to develop a tra company. Thus the Transportation Department's sales become the Bottling Department's cost of goo look like under a cost, market, and negotiated transfer pricing structure. These various transfer price Prepare an income statement for each of the transfer prices by filling in the missing numbers in the pro nearest whole number