Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with this question ABC plc operates an integrated cost accounting system and has a financial year which ends on 30 September. It

Please help me with this question

image text in transcribed
ABC plc operates an integrated cost accounting system and has a financial year which ends on 30 September. It operates in a processing industry in which a single product is produced by passing inputs through two sequential processes. A normal loss of 10% of input is expected in each process. The following account balances have been extracted from its ledger at 31 August: Dr Cr. Process 1 (Materials E4400; Conversion costs $3744) 8144 Process 2 (Process 1 4431; Conversion costs $5250) 9681 Abnormal loss 1400 Abnormal gain 300 Overhead control account 250 Sales 585 000 Cost of sales 442 500 Finished goods stock 65 000 ABC plc uses the weighted average method of accounting for work in process. During September the following transactions occurred: Process 1 Materials input 4000 kg costing $22 000 Labour cost E12 000 Transfer to process 2 2400 kg Process 2 Transfer from process 1 2400 kg Labour cost E15 000 Transfer to finished goods 2500 kg Overhead costs incurred amounted to E54 000 Sales to customers were E52 000 Overhead costs are absorbed into process costs on the basis of 150% of labour cost. The losses which arise in Process 1 have no scrap value: those arising in Process 2 can be sold for $2 per kg. Details of opening and closing work in process for the month of September are as follows: Opening Closing Process 1 3000 kg 3400 kg Process 2 2250 kg 2600 kg In both processes closing work in process is fully complete as to material cost and 40% complete as to conversion cost. Stocks of finished goods at 30 September were valued at cost of E60 000. Required: Prepare the ledger accounts for September and the annual profit and loss account of ABC plc. (Commence with the balances given above, balance off and transfer any balances as appropriate.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Textbook Of Financial Accounting And Analysis

Authors: Gaurav Agrawal

1st Edition

9350840901, 9789350840900

More Books

Students also viewed these Accounting questions

Question

LO6 Define harassment and the role that HR plays in addressing it.

Answered: 1 week ago