QUESTION 3 Petrokem Chemicals Nigeria Limited operates a chemical processing plant in Port Harcourt, Rivers State. The company manufactures a liquid industrial solvent through two sequential processes: Process I (Blending) and Process II (Refining). The following data relates to production activities for the month of October 2024: PROCESS I (BLENDING): Input: 20,000 litres of raw chemicals at N180 per litre Direct Labour: N720,000 Process Overhead: N480,000 Normal loss is expected to be 8% of input. Actual output transferred to Process II: 17,800 litres. Waste from Process I has no scrap value. PROCESS II (REFINING): Input received from Process I: 17,800 litres (transferred at Process I cost per litre) Additional Materials: N630,000 Direct Labour: N945,000 Process Overhead: N567,000 Normal loss in Process II is 10% of input. Actual output of finished solvent: 15,300 litres. Waste from Process II can be sold at N50 per litre. Required: (a) Prepare the Process I Account, clearly showing the abnormal loss or gain and the cost per litre transferred to Process II. (10 marks) (b) Prepare the Process II Account, clearly showing the abnormal loss or gain and the cost per litre of finished output. (10 marks) (c) Explain the accounting treatment of abnormal gain in process costing and state how the Abnormal Gain Account is ultimately closed off. (5 marks) Total: 25 marks