There were no beginning inventories on September 1, 2017. Seasons, Inc. is a producer of potato chips. A single production process at Seasons, Inc., yields potato chips as the main product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff point, and there are no separable costs. For September 2017, the cost of operations is $485,000. Production and sales data are as follows: (Click the icon to view the production and sales data.) Read the requirements. Requirement 1. What is the gross margin for Seasons, Inc., under the production method and the sales method of byproduct accounting? (Enter a "0" for any cells with a zero balance. For the main product inventory: Calculate the proportion of inventory first, then complete your calculation.) Production Sales method method Revenues Main product (potato chips) $ 755,040 $ 755,040 55,000 0 Byproduct (snack) Total revenues 755,040 810,040 485,000 Cost of goods sold Total manufacturing costs Deduct value of byproduct production Net manufacturing costs 485,000 86,000 0 399,000 485,000 106,700 Deduct main product inventory 87,780 Cost of goods sold 311,220 378,300 $ Gross margin 443,820 $ 431,740 Requirement 2. What are the inventory costs reported in the balance sheet on September 30, 2017, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? (Enter a "0" for any cells with a zero balance.) Production Sales method method $ 87,780 $ 106,700 Main product (potato chips) Byproduct (snack) 31,000 0 Requirement 3a. Prepare the journal entries to record the byproduct activities under the production method. (Record debits first, then credits. Exclude explanations from journal entries. Select "No journal entry needed" on the first line of the journal entry table and leave the other cells blank if a journal entry is not required.) Begin by preparing the entry to record the direct materials purchased and used in production during September. Accounts Debit Credit - Requirements Data table 1. What is the gross margin for Seasons, Inc., under the production method and the sales method of byproduct accounting? 2. What are the inventory costs reported in the balance sheet on September 30, 2017, for the main product and byproduct under the two methods of byproduct accounting in requirement 1? 3. Prepare the journal entries to record the byproduct activities under (a) the production method and (b) the sales method. Briefly discuss the effects on the financial statements. Production (in pounds) 44,000 8,600 Sales (in pounds) Selling Price per pound 34,320 $ 22 Potato Chips Byproduct 5,500 $ 10 Print Done Print Done Imber
