You are required to prepare a contract account for the year ending 31 December 1989 from the following particulars:
|
Rs |
|
|
Materials |
4,00,000 |
|
Wages |
5,00,000 |
|
Expenses |
1,00,000 |
|
Expenses occurred due |
20,000 |
|
Plant |
2,00,000 |
|
Work certified (90% received in cash) |
16,00,000 |
Materials at site (31 12 1989) Rs 40,000.
Depreciate plant by 10%. Ten per cent of the value of materials issued and 5% of the wages may be taken as incurred for the portion of the work completed, but not yet certified. Expenses are to be charged as a percentage to direct wages. Ignore depreciation on the uncertified portion of work. Ascertain the amount to be transferred to the profit and loss account.