Inter Process profits - only closing stock of finished goods - Problems
|Process X||Process Y|
The output of process X is transferred to process Y at a price calculated to give a profit of 20% on the transfer price and the output of process Y is charged to finished stock at a profit of 25% on the transfer price.
The finished department realized 1,00,000 for the finished goods received from process Y. You are asked to show process accounts and total profit assuming there was no opening and no closing work-in-progress.
| Opening stock|
The output of the Refining process is transferred to Finishing process at a price which is to yield 15% profit on transfer price and the output of the Finishing process is transferred to Finished Stock Account on a similar basis.
The output transferred to Finished stock was sold at 19,00,000.
Show the Process accounts and determine the profits realised on sale, assuming that there was no opening and closing stock in Finished Stock Account.
Also ascertain the value of closing stock.
The following data are obtained at the end of 31st October, _2.
|Process I||Process II||Process III||Finished Stock|
| Direct Material|
Stock on 31stOctober
Sale during the year
From the above information prepare:
(a) process cost accounts showing the profit element at each stage:
(b) actual realised profits; and
(c) stock valuation as would appear to the balance sheet.