The Watson Company operates a simple chemical process to convert a single material into three separate items, referred to here as X,Y, and Z. All three end products are separated simultaneously at a single splitoff point. (Click the icon for additional information.) Requirement 1. Compute the cost of inventories of X,Y, and Z for balance sheet purposes and the cost of goods sold for income statement purposes as of December 31 , 2017, using the (a) NRVand the (b) constant gress-margin pereentage NRV cost allecation metheds. More info Products X and Y are ready for sale immediately upon splitoff without further processing or any other additional costs. Product Z, however, is processed further before being sold. There is no available market price for Z at the splitoff point. The selling prices quoted here are expected to remain the same in the coming year. Requirements 1. Compute the cost of inventories of X,Y, and Z for balance sheet purposes and the cost of goods sold for income statement purposes as of December 31, 2017, using the following joint-cost-allocation methods: a. NRV (Net realizable value) method b. Constant gross-margin percentage NRV method 2. Compare the gross-margin percentages for X,Y, and Z using the two methods given in requirement 1. etermine the formula needed to compute the cost of goods sold using the NRV method. Compute the cost of goods sold for income statement purposes as of December 31,2017 , using the NRV cost allocation method. Determine the formula needed to compute the cost of ending inventory using the NRV method. = Ending inventory (NRV method) Compute the cost of inventories of X,Y, and Z for balance sheet purposes as of December 31, 2017, using the NRV cost allocation methoc The Watson Company operates a simple chemical process to convert a single material into three separate items, referred to here as X,Y, and Z. All three end products are separated simultaneously at a single splitoff point. (Click the icon for additional information.) Requirement 1. Compute the cost of inventories of X,Y, and Z for balance sheet purposes and the cost of goods sold for income statement purposes as of December 31 , 2017, using the (a) NRVand the (b) constant gress-margin pereentage NRV cost allecation metheds. More info Products X and Y are ready for sale immediately upon splitoff without further processing or any other additional costs. Product Z, however, is processed further before being sold. There is no available market price for Z at the splitoff point. The selling prices quoted here are expected to remain the same in the coming year. Requirements 1. Compute the cost of inventories of X,Y, and Z for balance sheet purposes and the cost of goods sold for income statement purposes as of December 31, 2017, using the following joint-cost-allocation methods: a. NRV (Net realizable value) method b. Constant gross-margin percentage NRV method 2. Compare the gross-margin percentages for X,Y, and Z using the two methods given in requirement 1. etermine the formula needed to compute the cost of goods sold using the NRV method. Compute the cost of goods sold for income statement purposes as of December 31,2017 , using the NRV cost allocation method. Determine the formula needed to compute the cost of ending inventory using the NRV method. = Ending inventory (NRV method) Compute the cost of inventories of X,Y, and Z for balance sheet purposes as of December 31, 2017, using the NRV cost allocation methoc
