By-product/joint product journal entries Arguillo Inc. is a 14,000 -acre farm that produces two products:...
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By-product/joint product journal entries Arguillo Inc. is a 14,000 -acre farm that produces two products: Zilla and Corma. Zilla sells for $3.50 per bushel (assume that a bushel weighs 60 pounds). Without further processing, Corma sells for $30 per ton (a ton equals 2,000 pounds). If the Corma is processed further, it can be sold for $45 per ton. Total joint cost up to the split-off poin was $2,450,000. Arguillo produced 70 bushels of Zilla and 1 ton of Corma per acre. If all the Corma were processed further, separate costs would bi $140,000. Prepare the journal entries for Corma if it is: Note: List any multiple debits or any multiple credits in alphabetical order by account name. a. transferred to storage at sales value as a by-product without further processing with a corresponding reduction of Zilla's production costs. b. further processed as a by-product and transferred to storage at net realizable value with a corresponding reduction of the manufacturing costs of Zilla. c. further processed and transferred to finished goods with joint cost allocated based on relative sales value at the split-off point. Note: Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar
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