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Whispering Inc. is in the corn-milling industry but to date has had only enough manufacturing space for one joint process. Whispering refers to its two products as prime products and by-products. There is a market for both products, but, as the names imply, the prime products are what Whispering got into business to sell, as the prime products' sales price far exceeds that of the by-products. In a typical production run, which costs $59,000, Whispering Inc. produces the following products, which can be sold at the prices shown. Prime products By-products Quantity Produced (a) 1,500 tons 890 tons Sales Price per Ton $50 $5 Because Whispering's customers (the corn processors) count on purchasing top-quality raw material from Whispering, it is important that the company maintains a steady amount of inventory. For this reason, Whispering never completely sells out of its products. For the current production run, managers plan to sell 80% of each product immediately, holding 20% in inventory to carry into the next period. Record the journal entries to recognize the completion of the products through the sale of both products if the production IC-

Whispering Inc. is in the corn-milling industry but to date has had only enough manufacturing space for one joint process. Whispering refers to its two products as prime products and by-products. There is a market for both products, but, as the names imply, the prime products are what Whispering got into business to sell, as the prime products' sales price far exceeds that of the by-products. In a typical production run, which costs $59,000, Whispering Inc. produces the following products, which can be sold at the prices shown. Prime products By-products Quantity Produced (a) 1,500 tons 890 tons Sales Price per Ton $50 $5 Because Whispering's customers (the corn processors) count on purchasing top-quality raw material from Whispering, it is important that the company maintains a steady amount of inventory. For this reason, Whispering never completely sells out of its products. For the current production run, managers plan to sell 80% of each product immediately, holding 20% in inventory to carry into the next period. Record the journal entries to recognize the completion of the products through the sale of both products if the production IC-

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Record the journal entries to recognize the completion of the products through the sale of both products if the production method is used to account for by-products. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation FG Inventory-By-Product FG Inventory - Main Product WIP Inventory (To record completion of products) Accounts Receivable Sales (To record sales of prime products) COGS FG Inventory - Main Product (To record cost of goods sold) Accounts Receivable FG Inventory - By-Product (To record sale of by-products) Debit Credit !!!
Transcribed Image Text:Record the journal entries to recognize the completion of the products through the sale of both products if the production method is used to account for by-products. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation FG Inventory-By-Product FG Inventory - Main Product WIP Inventory (To record completion of products) Accounts Receivable Sales (To record sales of prime products) COGS FG Inventory - Main Product (To record cost of goods sold) Accounts Receivable FG Inventory - By-Product (To record sale of by-products) Debit Credit !!!
Whispering Inc. is in the corn-milling industry but to date has had only enough manufacturing space for one joint process. Whispering refers to its two products as prime products and by-products. There is a market for both products, but, as the names imply, the prime products are what Whispering got into business to sell, as the prime products' sales price far exceeds that of the by-products. In a typical production run, which costs $59,000, Whispering Inc. produces the following products, which can be sold at the prices shown. Prime products By-products Quantity Produced (a) 1,500 tons 890 tons Sales Price per Ton $50 $5 Because Whispering's customers (the corn processors) count on purchasing top-quality raw material from Whispering, it is important that the company maintains a steady amount of inventory. For this reason, Whispering never completely sells out of its products. For the current production run, managers plan to sell 80% of each product immediately, holding 20% in inventory to carry into the next period. Record the journal entries to recognize the completion of the products through the sale of both products if the production method is used to account for by-products. (Credit account titles are automatically indented when the amount is entered. Do not indent
Transcribed Image Text:Whispering Inc. is in the corn-milling industry but to date has had only enough manufacturing space for one joint process. Whispering refers to its two products as prime products and by-products. There is a market for both products, but, as the names imply, the prime products are what Whispering got into business to sell, as the prime products' sales price far exceeds that of the by-products. In a typical production run, which costs $59,000, Whispering Inc. produces the following products, which can be sold at the prices shown. Prime products By-products Quantity Produced (a) 1,500 tons 890 tons Sales Price per Ton $50 $5 Because Whispering's customers (the corn processors) count on purchasing top-quality raw material from Whispering, it is important that the company maintains a steady amount of inventory. For this reason, Whispering never completely sells out of its products. For the current production run, managers plan to sell 80% of each product immediately, holding 20% in inventory to carry into the next period. Record the journal entries to recognize the completion of the products through the sale of both products if the production method is used to account for by-products. (Credit account titles are automatically indented when the amount is entered. Do not indent
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