Crispy, Inc. is a producer of potato chips. A single production process at Crispy, 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 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Data table Potato Chips Byproduct Production (in pounds) Sales (in pounds) 46,000 34,960 $ 8,200 5,000 $ Deduct value of byproduct production Print Done Selling Price per pound G 26 5 X There were no beginning inventories on September 1, 2020. Read the requirements. Requirements 1. What is the gross margin for Crispy, 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, 2020, 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 - X

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Crispy, Inc. is a producer of potato chips. A single production process at Crispy, 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 2020, the cost of operations is $520,000.
Production and sales data are as follows:
(Click the icon to view the production and sales data.)
Data table
Potato Chips
Byproduct
Production (in pounds) Sales (in pounds)
46,000
8,200
Deduct value of byproduct production
Print
34,960 $
5,000 $
Done
Selling Price per pound
26
5
X
There were no beginning inventories on September 1, 2020.
Read the requirements.
Requirements
1. What is the gross margin for Crispy, 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,
2020, 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
-
Transcribed Image Text:Crispy, Inc. is a producer of potato chips. A single production process at Crispy, 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 2020, the cost of operations is $520,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Data table Potato Chips Byproduct Production (in pounds) Sales (in pounds) 46,000 8,200 Deduct value of byproduct production Print 34,960 $ 5,000 $ Done Selling Price per pound 26 5 X There were no beginning inventories on September 1, 2020. Read the requirements. Requirements 1. What is the gross margin for Crispy, 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, 2020, 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 -
Expert Solution
steps

Step by step

Solved in 5 steps

Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education