Question

Contract price Rs 6,00,000 work certified
80% of contact price. Cash received 75% of
work certified. If notional profit is Rs.90,000
then the profit to be credited to profit and
loss A/c is
Rs 35,000
Rs 40,000
Rs 45,000
Rs 50,000​

Answer 1

Answer:

51thousand (loss)

Explanation:

answerrrrrrrrrrrrrrrr is 51 thousand is the loss amount

Answer 2

Answer:

C) 45000 is the amount of profit credited to profit and loss account. the profit depicted is the multiple of notional profit and 2/3 and the work cash received divided by certified valued.

Explanation:

Contract price Rs 6,00,000

work certified 80% of contact price.

Now,

80% of 6,00,000  = 4,80,000

Cash received 75% of work certified.

Now ,

75% of 480000  = 360000

notional profit is Rs.90,000

Then,

= Notional profit  *  2/3 * cash received/ work certified

= 90000 * 2/3 * 360000/480000

= 45000

• Thus, the amount of profit credited to P/L account is 45000. Contract refers to the agreement between the parties, that is legally Valid.
• Notional profit is defined as the value of work certified and value of work yet not certified and less cost work to date.

• This helps in easing up the calculation and comes up to end result of answer.