Required information Problem 24-5AC Allocation of joint costs LO C3 [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: 420,000 Ibs. @ $504,000 $1.20/lb No. 2: 420,000 Ibs. @ $336,000 $0.80/lb No. 3: 840,000 Ibs. $ 210,000 $0.25/lb Total sales $1,050,000 Costs Tree pruning and care @ 147,000 147,000 $0.35/Ib 294,000 588,000 Picking, sorting, and 42,000 42,000 grading @ $0.10/Ib 84,000 168,000 Delivery costs 16,100 16,100 38,600 70, 800 Total costs 205,100 205, 100 416,600 826,800 Net income (loss) $298,900 $130,900 $ (206,600) $ 223, 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 $32,200 of the $70,800 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,600 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery. Problem 24-5AC Part 1 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 Numerator Denominator % of Total x Indirect Cost Allocated Cost Nos. No. 1 No. 2 No. 3 Totals Picking, Sorting, and Grading: Grade Allocation Base x Indirect Cost Percent of Allocation Base Numerator Denominator % of Total Allocated Cost Nos. No. 1 No. 2 No. 3 Totals Delivery: Grade Allocation Base Percent of Allocation Base Numerator Denominator % of Total x Indirect Cost Allocated Cost Nos. No. 1 No. 2 No. 3 Totals 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.) GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2018 No. 1 No. 2 No. 3 Combined Costs Total costs 0 0 0 $ 0 0 $ 0 0 $ $ 0