50.1K

Verified Solution

Link Copied!

acc

Quality, Inc. is a producer of potato chips. A single production process at Quality. Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2017, the cost of operations is $480,000 Production and sales data are as follows: !!! (Click the icon to view the production and sales data.) There were no beginning inventories on September 1, 2017 Read the requirements. Res Requirement 1. What is the gross margin for Quality, Inc., under the production method and the sales method of byproduct accounting? (Enter a "O" for any calls with a zero balance. For the main product inventory: Calculate the proportion of inventory first, then complete your calculation) Production method method Mu Revenues Main product (potato chips) Cha Byproduct (snack) Dyr Total revenues Cost of goods sold Cor Total manufacturing costs Deduct value of byproduct production Net manufacturing costs harurt main art invent Deduct main product inventory Cost of goods sold Gross margin Pea Mu Requirement 2. What are the inventory costs reported in the balance sheet on September 30, 2017, for the main product and byproduct under the two methods of byproduct accounting in requirement 12 (Enter a "O" for any colls with a zero balance.) Production Sales method method Dyr Main product (potato chips) Byproduct (snack) Ass Production and sales data are as follows: !!! (Click the loon to view the production and sales data.) Requirement 3a. Prepare the journal entries to record the byproduct activities under the production method. (Record debits first, then credits. Exclude explanations from journal entries. Select No journal entry needed on the first line of the journal entry table and leave the other cols blank if a journal entry is not required.) Begin by preparing the entry to record the direct materials purchased and used in production during September. Debit Credit Record the entry for the cost of goods completed (for the byproduct) during September Accounts Debit Credit Choose from any list or enter any number in the input fields and then continue to the next question. Ass point, and there September 2017, the cost of operations is $480,000 Production and sales data are as follows: (Click the icon to view the production and sales data) Read the requirements Record the entry for the cost of goods completed for the main product during September Accounts Debit Credit Record the entry for sales of the byproduct during September Accounts Debit Credit Choose from any list or enter any number in the input fields and then continue to the next question Ass Production and sales data are as follows: !! (Click the loon to view the production and sales data.) Sales data are as follows: Record the entry for sales of the main product during September. (Do not record the cost, we will do this in the next step.) Accounts Debit Credit Record the entry for the cost of the main product sold during September Accounts Debit Credit Choose from any list or enter any number in the input fields and then continue to the next question Record the entry for the cost of goods completed for the main product) during September Accounts Debit Credit Record the entry for sales of the byproduct during September Accounts Debit Credit Ass QUI pari bosis. Fo September 2017, the cost of operations is $480,000 Production and sales data are as follows: (Click the icon to view the production and sales data.) Stu Record the entry for sales of the main product during September. (Do not record the cost, we will do this in the next step.) Accounts Credit Res Debit Cha Record the entry for the cost of the main product sold during September Dyr Accounts Debit Credit Coro Choose from any list or enter any number in the input fields and then continue to the next question. MacBook Air VISUS UT statements Under the method revenue is not recognized for the sale of the byproduct. Instead, the NRV of the This method is consistent with the matching principle and is therefore the preferred method. is offset against the cost of the Under the method, the NRV is recognized only upon sale Choose from any list or enter any number in the input fields and then continue to the next question No journal entry needed Accounts Payable Accumulated Depreciation Cash or A/R Cost of Goods Sold Finished Goods - byproduct Finished Goods - main product Inventory - byproduct Salaries Expense Salaries Payable Sales Revenue - byproduct Sales Revenue - main pro Work in Process ) 7 Requirements beginning inventories on September 1, 2017 coments 1. What is the gross margin for Quality, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2017, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. Print Done i Data Table Briefly discuss the effects Production (in pounds) cost of the Under them This meth 54.000 Potato Chips Byproduct Sales (in pounds) Selling Price per pound 41,040 7.500 5 8.400 Under the Print Done Choose from any list or