M/s Pari & Company obtained a contract for building a factory for Rs 10,00,000. Building operations started on 1st April 1984 and at the end of March 1985, they received from the contractee a sum of Rs 3,90,000 being 75% of the amount due on surveyor’s certificate. The following additional information is given from the books of Pari & Company Limited.
|
Rs |
|
|
Stores issued to contract |
2,00,000 |
|
Stores on hand on 31 3 1985 |
10,000 |
|
Wages paid |
1,80,000 |
|
Plant purchased |
2,00,000 |
|
Direct expenses |
25,000 |
|
Overheads allocated to contract |
12,000 |
|
Work finished but not yet certified |
12,000 |
Plant to be depreciated at 10%. You are required to prepare an account showing profit and loss on contract as on 31 3 1985 and the amount of profit the company would be justified in taking to the credit of profit and loss account for the year.