Question

1
E. 5. A construction company took a contract
in 1989 for road construction. The contract price
was Rs. 5,00,000 and its estimated cost of completion
would be Rs. 4.60,000. At the end of 1989, the
company had received Rs. 1,80,000 representing
90 percent of work certified. Work not yet certified
had cost Rs. 5,000.
Expenditure incurred on the contract during 1989
was as follows:
Rs.
Materials
25.000
Labour
1.50.000
Plant
10.000
Materials costing Rs. 2,500 were damaged and had
to be disposed off for Rs. 500. Plant was considered as
having depreciated by 25 per cent. Prepare Contract
Account for 1989 in the books of the construction
company. Also show the amount of profit that can be
reasonably credited to Profit and Loss Account in
respect of the contract.​

Answer 1

Explanation:

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