Prepare the journal entries
By-product/joint product
Arguillo Inc. is a 10,000 -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 point was $1,750,000. Arguillo produced 70 bushels of Zilla and 1 ton of Corma per acre. If all the Corma were processed further, separate costs would be $100,000.
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.
| Account | Debit | Credit |
|---|---|---|
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| To record completed production of by-product |
b. further processed as a by-product and transferred to storage at net realizable value with a corresponding reduction of the
| Account | Debit | Credit |
|---|---|---|
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| To record completed production of by-product |
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.
| Account | Debit | Credit |
|---|---|---|
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| To allocate joint cost | ||
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| To record separate |
||
| Answer | Answer | Answer |
| Answer | Answer | Answer |
| To record completed production of Corma |
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