Excellent Erectors Ltd. took up a contract for construction of a building at a contract price of Rs. 15 lakhs. During the first year, the following amounts were spent as against a sum of Rs. 5,62,500, which represented 90%of the work certified and received by the contractor.
|
Materials |
2,62,500 |
|
Wages paid to workers |
1,50,000 |
|
Overhead expenses |
37,500 |
During the second year, the firm spent the following amounts:
|
Materials |
3,75,000 |
|
Labour cost |
3,00,000 |
|
Overhead expenses |
75,000 |
In the second year, the contract was completed and the sum of Rs. 8,75,00 was received by the contractor. Prepare the contract and contractee’s accounts for both the years and calculate the profit.