INSTRUCTIONS:

Using the Microsoft Excel, kindly prepare an Income Statement in each of the independent problems given below:

Also, use the following format:

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Beauty and Cosmetics Desires Inc. manufactures two products, X and Y. Incident to the production is the by-product, A. Processing and disposal costs associated with by-product sales are P0.06 per pound of by-product A.

During April 20xx, Variety Potato Snacks Inc. produced and sold 135,000 pounds of by-product A for P20,250.

In addition, the joint cost for producing products X and Y was P82,000; separate costs of production were P48,000.

In April, 90% of all joint production was sold for P319,000. Non-factory operating expenses for the month of April were P47,850.

1. Prepare an income statement for Beauty and Cosmetics Desires Inc. assuming that by-product sales are shown as Other Revenue and the processing and disposal costs for the by-product are shown as additional cost of goods sold of the joint products

2. Prepare an income statement for Beauty and Cosmetics Desires Inc. assuming that the net realizable value of the by-product is shown as Other Income.

3. Prepare an income statement for Beauty and Cosmetics Desires Inc. assumingthat the net realizable value of the by-product is subtracted from the joint cost of the main products.