The following trial balance was extracted on 31st December 1997 from the books of Swastik Company Limited contractors:
|
Rs |
Rs |
|
|
Share capital: shares of Rs 10 each |
3,71,800 |
|
|
Profit and loss account on 1st January 1997 |
25,000 |
|
|
Provision for depreciation of machinery |
63,000 |
|
|
Cash received on account: contract 7 |
12,80,000 |
|
|
Creditors |
81,200 |
|
|
Land and buildings (cost) |
74,000 |
|
|
Machinery (cost) |
52,000 |
|
|
Bank |
45,000 |
|
|
Contract 7: |
||
|
Materials |
6,00,000 |
|
|
Direct labour |
8,30,000 |
|
|
Expenses |
60,000 |
|
|
Machinery at site (cost) |
1,60,000 |
_______ |
|
18,21,000 |
18,21,000 |
Contract 7 was begun on 1st January, 1997. The contract price is Rs 34,00,000 and the customer has so far paid Rs 13,80,000 being 80% of the work certified.
The cost of the work done since certification is estimated at Rs 25,000.
On 31st December 1997, after the above trial balance was extracted, machinery costing Rs 32,000 was returned to stores, and materials when at site were valued at Rs 30,000.
Provision is to be made for direct labour due Rs 6,000 and for depreciation of all machinery at 12½% on cost.
You are required to prepare: (a) the contract account, (b) a statement of profit, if any, to be properly credited to profit and loss account for 1997, and (c) the balance sheet of Swastik Company Limited as on 31st December.