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Answers
Explanation:
he Sturdy Construction Company Limited has undertaken the construction of flyover. The value of the contract is Rs. 12,50,000 subject to a retention 0f 20% until one year after the certified completion of the contract, and final approval of the corporation’s engineer. The following are the details as shown in the books 31st March 2021
Labour on site Rs. 4,05,000
Material direct to site less returns Rs. 4,20,000
Material received from stores Rs. 81,200
Hire and use of plant – plant upkeep account Rs. 12,100
Direct expenses Rs. 23,000
General overheads allocated to the contract Rs. 37,100
Material in hand on 31st March 2021 Rs. 6,300
Wages accrued/outstanding on 31st March 2021 Rs. 7,800
Direct expenses accrued/outstanding on 31st March 2021 Rs. 1,600
Work not yet certified by the Corporation Engineer Rs. 16,500
Amount certified by the Corporation Engineer Rs. 11,00,000
Cash received on account Rs. 8,80,000
Prepare (a) Contract account; (b) how the relevant items would appear in the Balance Sheet.