PART 2
PART 1
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: 257,500 Ibs. @ $1.80/lb $463,500 No. 2: 257,500 Ibs. @ $1.40/1b $360,500 No. 3: 824,000 Ibs. @ $0.25/lb $ 206,000 Total sales $1,030,000 Costs Tree pruning and care @ $0.50/Ib 128,750 128,750 412,000 669,500 Picking, sorting, and grading @ $0.10/Ib 25,750 25,750 82,400 133,900 Delivery costs 16,000 16,000 38,400 70,400 Total costs 170,500 170,500 532,800 873, 800 Net income (loss) $293,000 $190,000 $(326,800) $ 156,200 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 $32,000 of the $70,400 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,400 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 Required information [The following information applies to the questions displayed below.] 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: 257,500 Ibs. @ $1.80/lb $463,500 No. 2: 257,500 Ibs. @ $1.40/lb $360,500 No. 3: 824,000 Ibs. @ $0.25/lb $ 206,000 Total sales $1,030,000 Costs Tree pruning and care @ $0.50/Ib 128,750 128,750 412,000 669,500 Picking, sorting, and grading @ $0.10/Ib 25,750 25,750 82,400 133,900 Delivery costs 16,000 16,000 38,400 70, 400 Total costs 170,500 170,500 532,800 873,800 Net income (loss) $293,000 $190,000 $(326,800) $ 156,200 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 $32,000 of the $70,400 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,400 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery. Required: 1. Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.) Tree Pruning and Care: Grade Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 0 No. 2 0 No. 3 0 0 Totals 0 Picking, Sorting, and Grading: Grade Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 0 No. 2 0 No. 3 0 0 Totals 0 Delivery: Allocation Base x Indirect Cost Allocated Cost Grade Nos. Percent of Allocation Base Numerator Denominator % of Total No. 1 0 No. 2 0 No. 3 Totals
