Account for the removal, additional processing, and sale of a byproduct;

use the normal net profit method to record the value at separation. (Objs. 3, 5). In the Refining Department of Viva Chemicals Corporation, a by-product is recovered. It is further processed after separation and is sold to a medicinal manufacturer as a raw material. During Jamuary 19X9, 500 pounds of the by-product were recovered. The by-product is removed from the Work in Process

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Refining Department account on the basis of a formula determined in advance for the quarter. Based on an expected sales price of $10 per pound, estimated manufacturing cost after separation of $3 per pound, estimated selling and administrative expenses of 10 percent of the sales price, and a normal profit of 8 percent of selling price, the by-product is transferred from the Refining Department to Work in Process—By-Product, using the normal net profit method. Additional manufacturing costs of $1 ,600 were incurred on the 500 pounds after separation. The 500 pounds were sold for $9.80 per pound.

a. Give the journal entry to record removal of the 500 pounds from the Refining Department. Use the normal net profit method to determine the cost to be removed.

b. Give the journal entry to record the mcinufacturing costs incurred after separation, $1,600. Credit Raw Materials, Factory Payroll Clearing, and Manufacturing Overhead Control for $1,600.

c. Give the entry to record completion of the by-product and its transfer to Inventory of By-Product.

d. Give the entry to record the sale of the 500 pounds of by-product for $10 per pound.

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