DRY Corporation Recently Disposed of a By-Product at a Net

question 109

Multiple Choice

DRY Corporation recently disposed of a by-product at a net cost of $500. Provided that amount is considered material, the $500 should be accounted for as:

• A) Part of the separable cost of the by-product
• B) A decrease in by-product inventory on the balance sheet
• C) An increase in by-product inventory on the balance sheet
• D) Part of the joint costs of production

---

Definitions:

Chitin-Hardened Jaws

Structural feature referring to jaws strengthened by chitin, a fibrous substance forming the exoskeleton of arthropods and other organisms.

Marine Polychaetes

A diverse class of annelid worms, commonly known as bristle worms, that live in various marine environments.

Chitin-Reinforced Bristles

Stiff bristles made stronger with the natural polymer chitin, commonly found in the exoskeletons of arthropods.

Chitin-Hardened Tentacles

Tentacles strengthened by chitin, a polysaccharide found in the exoskeletons of arthropods and cell walls of fungi.