A building contractor furnishes the following records about a contract commenced on 1 April 1985. Expenses incurred on the contract up to 31 December 1985 were:
|
Rs |
|
|
Materials purchased |
21,500 |
|
Wages paid |
50,110 |
|
Foreman’s salary |
6,310 |
|
Administrative expenses |
12,610 |
|
Machinery purchased |
15,000 |
A supervisor with a monthly salary of Rs 1,000 has spent about half of his time on this contract. Materials at site on 31 12 1985 were worth Rs 2,480. The machinery purchased was used for 73 days. The estimated life of the machine is five years and its scrap value is estimated at Rs 1,000.
The contract price is fixed at Rs 2,00,000. On 31 December 1985, two thirds of the contract was completed. Work certified was worth Rs 1,00,000 and Rs 80,000 have been paid on account. Prepare the contract account.