Product A passes through three processes before it is completed and transferred to the fi nished stock. There were no stocks in hand and no WIP too on 1June. The following data were available in respect of Processes 1,2 and 3 for the month of June

Stocks of fi nished goods amounted to Rs. 1,11,000 and the stock was valued at Rs. 5000. The output of each process is transferred to the next process at an amount which will yield 20% of profi t on the transfer price. The transfer from Process 3 to the fi nished stock is to be similarly treated.
Prepare

(a) Necessary process accounts and fi nished stock account showing the profi t element at each stage and

(b) Ascertain the value of closing stock for the purpose of balance sheet.

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Process 1 Process 2 Process 3 Details Rs. Rs. Rs. Direct materials 20,000 5,000 4,000 Direct wages 15,000 10,000 20,000 Stock of materials 5,000 6,500 9,500