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

Question 188

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: img 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.