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Potato skins are generated as a by-product in making potato chips and frozen hash browns at Zeena Foods. The skins are sold to restaurants for use in appetizers. Processing and disposal costs associated with by-product sales are $0.06 per pound of potato skins. During May, Zeena Foods produced and sold 108,000 pounds of potato skins for $16,200. In addition, the joint cost for producing potato chips and hash browns was $65,600; separate costs of production were $38,400. In May, 90 percent of all joint production was sold for $255,200. Non-factory operating expenses for May were $38,280. a. Prepare an income statement for Zeena Foods assuming that by-product sales are shown as Other Revenue and the processing and disposal costs for the by- product are shown as additional cost of goods sold of the joint products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) Cost of goods sold: Joint cost 24 Separate costs By-products Gross profit Non-factory expenses Income from operations 24 Other revenues (by-product sales) Income before taxes b. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is shown as Other Income. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) 24 Cost of goods sold Gross profit Non-factory expenses Income from operations $ Other income (by-product sales) Income before taxes $ c. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is subtracted from the joint cost of the main products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue Cost of goods sold Gross profit Non-factory expenses Income before taxes $4

Potato skins are generated as a by-product in making potato chips and frozen hash browns at Zeena Foods. The skins are sold to restaurants for use in appetizers. Processing and disposal costs associated with by-product sales are $0.06 per pound of potato skins. During May, Zeena Foods produced and sold 108,000 pounds of potato skins for $16,200. In addition, the joint cost for producing potato chips and hash browns was $65,600; separate costs of production were $38,400. In May, 90 percent of all joint production was sold for $255,200. Non-factory operating expenses for May were $38,280. a. Prepare an income statement for Zeena Foods assuming that by-product sales are shown as Other Revenue and the processing and disposal costs for the by- product are shown as additional cost of goods sold of the joint products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) Cost of goods sold: Joint cost 24 Separate costs By-products Gross profit Non-factory expenses Income from operations 24 Other revenues (by-product sales) Income before taxes b. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is shown as Other Income. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) 24 Cost of goods sold Gross profit Non-factory expenses Income from operations $ Other income (by-product sales) Income before taxes $ c. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is subtracted from the joint cost of the main products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue Cost of goods sold Gross profit Non-factory expenses Income before taxes $4

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Potato skins are generated as a by-product in making potato chips and frozen hash browns at Zeena Foods. The skins are sold to restaurants for use in appetizers. Processing and disposal costs associated with by-product sales are $0.06 per pound of potato skins. During May, Zeena Foods produced and sold 108,000 pounds of potato skins for $16,200. In addition, the joint cost for producing potato chips and hash browns was $65,600; separate costs of production were $38,400. In May, 90 percent of all joint production was sold for $255,200. Non-factory operating expenses for May were $38,280. a. Prepare an income statement for Zeena Foods assuming that by-product sales are shown as Other Revenue and the processing and disposal costs for the by- product are shown as additional cost of goods sold of the joint products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) Cost of goods sold: Joint cost Separate costs By-products Gross profit $ Non-factory expenses Income from operations Other revenues (by-product sales) Income before taxes $ b. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is shown as Other Income. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) 2$ Cost of goods sold Gross profit Non-factory expenses Income from operations Other income (by-product sales) Income before taxes $ c. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is subtracted from the joint cost of the main products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue Cost of goods sold Gross profit 2$ Non-factory expenses Income before taxes 2$
Transcribed Image Text:Potato skins are generated as a by-product in making potato chips and frozen hash browns at Zeena Foods. The skins are sold to restaurants for use in appetizers. Processing and disposal costs associated with by-product sales are $0.06 per pound of potato skins. During May, Zeena Foods produced and sold 108,000 pounds of potato skins for $16,200. In addition, the joint cost for producing potato chips and hash browns was $65,600; separate costs of production were $38,400. In May, 90 percent of all joint production was sold for $255,200. Non-factory operating expenses for May were $38,280. a. Prepare an income statement for Zeena Foods assuming that by-product sales are shown as Other Revenue and the processing and disposal costs for the by- product are shown as additional cost of goods sold of the joint products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) Cost of goods sold: Joint cost Separate costs By-products Gross profit $ Non-factory expenses Income from operations Other revenues (by-product sales) Income before taxes $ b. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is shown as Other Income. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue (joint products) 2$ Cost of goods sold Gross profit Non-factory expenses Income from operations Other income (by-product sales) Income before taxes $ c. Prepare an income statement for Zeena Foods assuming that the net realizable value of the by-product is subtracted from the joint cost of the main products. Note: Do not use a negative sign with your answers. Zeena Foods Income Statement For Month Ended May 31 Sales revenue Cost of goods sold Gross profit 2$ Non-factory expenses Income before taxes 2$
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