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: 272,500 Ibs. @ $1.80/lb	$	490,500
No. 2: 272,500 Ibs. @ $1.40/lb				$	381,500
No. 3: 872,000 Ibs. @ $0.25/lb							$	218,000
Total sales											$	1,090,000
Costs
Tree pruning and care @ $0.50/Ib		136,250			136,250			436,000				708,500
Picking, sorting, and grading @ $0.10/Ib		27,250			27,250			87,200				141,700
Delivery costs		16,600			16,600			39,000				72,200
Total costs		180,100			180,100			562,200				922,400
Net income (loss)	$	310,400		$	201,400		$	(344,200	)		$	167,600

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 $33,200 of the $72,200 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,000 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.)

[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: 272,500 Ibs. @ $1.80/lb	$	490,500
No. 2: 272,500 Ibs. @ $1.40/lb				$	381,500
No. 3: 872,000 Ibs. @ $0.25/lb							$	218,000
Total sales											$	1,090,000
Costs
Tree pruning and care @ $0.50/Ib		136,250			136,250			436,000				708,500
Picking, sorting, and grading @ $0.10/Ib		27,250			27,250			87,200				141,700
Delivery costs		16,600			16,600			39,000				72,200
Total costs		180,100			180,100			562,200				922,400
Net income (loss)	$	310,400		$	201,400		$	(344,200	)		$	167,600

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 $33,200 of the $72,200 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,000 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.)