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This video shows the journal entries for a byproduct when the company uses the Sales Method of accounting for byproducts.

Under the Sales Method, no journal entries are recorded for the byproduct until the byproduct is sold. Thus, if a company produced 3,000 pounds of a byproduct and sold 1,000 pounds this period for $4/pound, the company would credit Other Revenue or Other Income in the current period (this is a nonoperating item). If the firm then sold the remaining 2,000 pounds of byproduct for $4/pound in the following period, the company would credit $8,000 of Other Revenue or Other Income in that period. Thus, sales of the byproduct affect the company’s profit in the period when the byproduct is sold.