Question

2. The contractor accepted a contract for the construction of a
for Rs. 10,00,000, the contractee agreeing to pay 90% of t
certified as completed by the architect. During the first
amounts spent were:
Materials Rs. 1,20,000, Labour Rs. 1,50,000
Machinery Rs. 30,000, Other Exps. Rs. 90,000.
At the end of the year, the machinery was considered to
Rs. 20,000 and materials at site of the value of Rs. 5000. Work
during the year totalled Rs. 4,00,000. In addition work-in-progr
not certified at the end of the year had cost Rs. 15,000. Prepare
A/c in the books of the contractor. Also show amount of profit
reasonably be transferred to the Profit & Loss Account.​

Answer 1

The Contract A/c in the books of the contractor would show a total cost of Rs. 10,95,000 and a profit of Rs. 4,05,000.

Here's a table showing the calculations for the Contract A/c:

(refer the image for answer)

Therefore, the Contract A/c in the books of the contractor would show a total cost of Rs. 10,95,000 and a profit of Rs. 4,05,000.

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