Page 204 - F2 - MA Integrated Workbook STUDENT 2018-19

Chapter 9

Abnormal gain
 An abnormal gain is less loss than expected – decrease in the
NL and an increase in good output

 AG is transferred to the AG account at the value of good output

– Dr Process account, Cr AG account

 AG is then transferred to the scrap account at the scrap value

– Dr AG account, Cr Scrap account

There is a step by step procedure that can be followed for process costing and
losses:

 Balance the units.

 Value the normal loss.

 Calculate the average cost per unit.

 Value the outputs, AL or AG at the average cost per unit and complete the
process account.

 Transfer the NL to the scrap account at the scrap value.

 Transfer the AL or AG to the AL/AG account at the value of good output

 Transfer the AL or AG to the scrap account at the scrap value

 Balance the AL/AG and scrap accounts

Note: Not all steps may be required – it depends on whether the losses in the
process can be sold or not.

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