QUESTION TWO Major Ltd. Produces products "Glucodin" which passes through two processes before it is completed and transferred to finished stock. The following data relates to March 2020. Process I Process II Finished stock Sh. Sh. Sh. Opening stock 150,000 180,000 450,000 Direct materials 300,000 315,000 ------ Direct wages 224,000 225,000 ------ Factory overheads 210,000 90,000 ------ Closing stock 74,000 90,000 225,000 Inter profit process included in opening stock 160 360,000 165,000

Output of process I is transferred to process II at 25 percent profit on the transferred price, whereas output of process II is transferred to finished stock at 20 percent of transfer price. Stock in processes are valued at prime cost. Finished stock is valued at the price at which it is received from process II. Sales for the month is sh. 2,800,000.

Required Prepare process I account, Process II account and finished stock account showing the profit element of each stage. (15 marks)