Cando Company processes 40,000 litres of direct materials to produce two products, Bilgot and Camdee.Bilgot, a byproduct, sells for $9 per litre, and Camdee, the main product, sells for $50 per litre.The following information is for July:
The manufacturing costs totalled $260,000; beginning inventory $3,200.Required:
1.Prepare a July income statement assuming that Helen Company recognizes the byproduct revenue at the time of sale.The company uses FIFO for the inventory flow assumption.2.Prepare the journal entry to record the byproduct sales.

Question

Cando Company processes 40,000 litres of direct materials to produce two products, Bilgot and Camdee.Bilgot, a byproduct, sells for $9 per litre, and Camdee, the main product, sells for $50 per litre.The following information is for July:
  The manufacturing costs totalled $260,000; beginning inventory $3,200.Required:
1.Prepare a July income statement assuming that Helen Company recognizes the byproduct revenue at the time of sale.The company uses FIFO for the inventory flow assumption.2.Prepare the journal entry to record the byproduct sales.

Quizplus · Accepted Answer

The Answer of Cando Company processes 40,000 litres of direct materials to produce two products, Bilgot and Camdee.Bilgot, a byproduct, sells for $9 per litre, and Camdee, the main product, sells for $50 per litre.The following information is for July:
  The manufacturing costs totalled $260,000; beginning inventory $3,200.Required:
1.Prepare a July income statement assuming that Helen Company recognizes the byproduct revenue at the time of sale.The company uses FIFO for the inventory flow assumption.2.Prepare the journal entry to record the byproduct sales.

Cando Company Processes 40,000 Litres of Direct Materials to Produce