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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: 270,000 Ibs. @ $1.80/lb	$	486,000
No. 2: 270,000 Ibs. @ $1.20/lb				$	324,000
No. 3: 1,080,000 Ibs. @ $0.25/lb							$	270,000
Total sales											$	1,080,000
Costs
Tree pruning and care @ $0.20/Ib		54,000			54,000			216,000				324,000
Picking, sorting, and grading @ $0.15/Ib		40,500			40,500			162,000				243,000
Delivery costs		16,300			16,300			38,800				71,400
Total costs		110,800			110,800			416,800				638,400
Net income (loss)	$	375,200		$	213,200		$	(146,800	)		$	441,600

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 $32,600 of the $71,400 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,800 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.) GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2018 No. 2 No.1 No. 3 Combined Costs Total costs 0 0 0 $ 0 $ O 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: Percent of Allocation Base Grade Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 0 No. 2 No. 3 0 0 Totals Picking, Sorting, and Grading: Percent of Allocation Base Grade 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: Percent of Allocation Base Grade Allocation Base x Indirect Cost Allocated Cost Nos. Denominator Numerator % of Total No. 1 0 No. 2 No. 3 Totals