Question

A company undertook a contract for construction of a large building complex. The construction was
commenced on 1st April, 2014 and the following data are available for the year ended 31st March
2015 :
Contract Price ₹ 35,000; Work certified ₹ 20,000; Progress Payments Received ₹ 15,000; Material
Issued to Site ₹ 7,500; Planning & Estimating Costs ₹ 1,000; Direct Wages Paid ₹ 4,000; Material
returns from Site ₹ 250; Plant Hire Charges ₹ 1,750; Wage related Costs ₹ 500; Site Office Costs
₹ 678; Head Office Expenses Apportioned ₹ 375; Direct Expenses incurred ₹ 902; Work not certified
₹ 149.
The contractors own a plant which originally cost ₹ 2,000 has been continuously in use in this contract
throughout the year. The residual value of the plant after 5 years of life is expected to be ₹ 500
Straight line method of depreciation is in use.
As on 31st March, 2015 the direct wages due and payable amounted to ₹ 270 and the materials at
site were estimated at ₹ 200. You are required to:
(a) Prepare the Contract A/c for the year ended 31st March, 2015,
b) Show the calculation of profit to be taken to P & L A/c of the year,
(c) Show the relevant Balance Sheet entries.​

Answer 1

Answer:

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