New Century Builders have entered into a contract to build an office building complex for 480 lakhs. The work started in April 2008 and is estimated that the contract will take 15 months to be completed. Work has progressed as per schedule and the actual costs charged till March 2010 are as follows:
|
Rs.(in lakhs) |
|
|
Materials |
112–20 |
|
Labour |
162–00 |
|
Hire charges for equipments and other charges |
36–00 |
|
Establishment charges |
32–40 |
|
342–60 |
The following information is available:
|
Materials in hand (31 March 2010) |
6–60 |
|
Work certified (of which Rs. 324 lakhs have been paid) as on 31 March 2010 |
400– |
|
Work not yet certified as on 31 March 2010 |
7–50 |
As per management estimates, the following further expenditure will be incurred to complete the work:
|
(Rs. in lakhs) |
|
|
Materials |
10 – 50 |
|
Labour |
16–00 |
|
Sub-contractors |
20–00 |
|
Equipments hire and other charges |
3–00 |
|
Establishment charges |
6–90 |
You are required to prepare the contract account after considering a reasonable margin of profit. Make a provision for contingencies amounting to 5%of total costs.