pathfinder - The Institute of Chartered Accountants of Nigeria

PATHFINDER(iii)Joint ProductsWhen individual products in a group are simultaneously produced, with eachproduct having a significant relative sales value, the outputs are usually calledjoint products. The products are not identifiable as different individualproducts until a certain stage of production known as the split-off point. Allcosts incurred prior to the split-off point are called joint-product cost. Examplesinclude chemicals, petroleum products, soap making, flour milling etc.(iv)By-ProductsBy-products are products that have minor sales value as compared with that ofthe major or chief products e.g. mill ends of the cloth and carpets. The netrealizable value is treated as a deduction from the main product.(b)Holdings Construction LimitedContract AccountNNMaterial direct 1,600,000 Plant returned 17,800,000Material ex-store 240,000 Plant on site c/d 8,600,000Wages 3,000,000 Material on site c/d 350,000Overhead500,000 Work in Progress atDec. 31 st @ cost c/d 5,720,000Plant 27,000,000Accrued waged 130,000c/d32,470,000 32,470,000Bal b/dBal b/dWork in Progress 5,720,000 Accrued wages 130,000Plant on site 8,600,000Materials on site 350,000Contract – Certificate AccountNNBalance c/d 6,880,000 Certified Work 6,400,000Work done not -yet certified @ cost 480,0006,880,000 6,880,000INTERMEDIATE EXAMINATION - NOVEMBER 201125