Jones Manufacturing Co. Ltd. makes a product by way of three consecutive processes. Inspection takes place during the processing operation, at which point bad units are separated from good units and sold as scrap at $20 each. Normal losses are estimated to be 5% of input during the period. The following data relates to process 2 for the month of October. During October, 20,000 units valued at $400,000 were transferred from process 1 to process 2. Other costs incurred during the month were: Direct material added $272,000 Direct labour $254,000 Production overheads $ 120,400 At inspection, 3000 units were rejected as scrap. These units had reached the following degree of completion: Transfer from process 1 100% Direct material added 80% Conversion costs 50% Work-in-progress at the end of October was 4,000 units and had reached the following degree of completion: Transfer from process 1 100% Direct material added 60% Conversion costs 40% There were no unfinished goods in process 2 at the beginning of the period.

iv) Prepare the abnormal loss/gain statement, clearly showing the amount transferred to the costing profit and loss account.

v) Present the journal entries to record the assignment of direct materials and direct labour and the allocation of manufacturing overhead to Process 2. Also give the journal entry to record the cost of the units completed and transferred out to Process 3.