A contractor obtained a contract for Rs 6,00,000 on 1st January 1988. The expenses incurred during the year ended 31st December 1988 were as under.
|
Rs |
|
|
Materials |
1,80,000 |
|
Wages paid |
1,60,000 |
|
Wages accrued |
10,000 |
|
Other expenses |
25,000 |
The plant, specially installed for the contract, worth Rs 45,000 was returned to the stores subject to a depreciation of 20%. Materials at site on 31 12 1988 were valued at Rs 24,000.
The contractor had received Rs 3,60,000 in cash up to 31 12 1988, representing 80% of the work certified. Work uncertified was estimated at Rs 4,000.
Prepare the contract account, showing the profit for the year. Also show how the value of work in progress would appear in the balance sheet as on 31st December 1988.