The following data is provided for Garcon Company and Pepper Company for the year ended December 31.

	Garcon Company	Pepper Company
Finished goods inventory, beginning	$ 12,000	$ 16,450
Work in process inventory, beginning	14,500	19,950
Raw materials inventory, beginning	7,250	9,000
Rental cost on factory equipment	27,000	22,750
Direct labor	19,000	35,000
Finished goods inventory, ending	17,650	13,300
Work in process inventory, ending	22,000	16,000
Raw materials inventory, ending	5,300	7,200
Factory utilities	9,000	12,000
General and administrative expenses	21,000	43,000
Indirect labor	9,450	10,860
RepairsFactory equipment	4,780	1,500
Raw materials purchases	33,000	52,000
Selling expenses	50,000	46,000
Sales	195,030	290,010
Cash	20,000	15,700
Accounts receivable, net	13,200	19,450

1. Prepare income statements for both Garcon Company and Pepper Company. 2. Prepare the current assets section of the balance sheet for each company.

Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper Prepare the income statement for Garcon Company. GARCON COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold: Finished goods inventory, beginning $ Cost of goods manufactured $ 195,030 12,000 Goods available for sale Less: Finished goods inventory, ending Cost of goods sold 12,000 (17,650) (5,650) Direct labor Selling expenses General and administrative expenses Net income 24,400 X 50,000 21,000 $ (95,400) Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper Prepare the income statement for Pepper Company. PEPPER COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold: Finished goods inventory, beginning $ Cost of goods manufactured $ 290,010 16,450 16,450 13,300 Goods available for sale Less: Finished goods inventory, ending Cost of goods sold Gross profit Factory utilities Selling expenses General and administrative expenses 3,150 286,860 46,000 43,000 Net income $ 197,860 Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper Prepare the current asset section of the balance sheet for Garcon Company. GARCON COMPANY Balance Sheet-Current Assets Section December 31 Cash Accounts receivable, net Raw materials inventory Work in process inventory Finished goods inventory Total current assets 0 Req 1 Garcon Req 1 Pepper Req 2 Garcon Req 2 Pepper Prepare the current asset section of the balance sheet for Pepper Company. PEPPER COMPANY Balance Sheet-Current Assets Section December 31 Cash Accounts receivable, net Raw materials inventory Work in process inventory Finished goods inventory Total current assets $ 0