Record the removal and sale of a by-product not requiring further processing. (Obj. 1). The Carlton Company produces field seed.

Screenings, a by-product, are sold to a garden outlet to be used in mulch products. During the month of May 19X9, screenings with an estimated value of SI.250 were removed from factory operations and stored in a warehouse. On June 9, the materials were sold for SI, 180.

Give the general journal entries to record these facts if the following procedures are used:

a. The company treats the proceeds from the sale as miscellaneous income at the time of sale.

b. The company treats the estimated value of its by-products as a reduction in the cost of the main product at the time of removal.

LO.1