Model: Estimated Profit on Completion of Contract
VRS Ltd is engaged in construction of a Flyover Project in Chennai. From the following information as on 31 March 2010 you are required to calculate:
- Profit to be transferred to P&L A/c (i.e., estimated profit to date on the contract)
- Estimated profit on completion of the contract
- Cost of the WIP at the year end.
|
Contract price |
Rs.40,00,000 |
|
Work certified |
Rs.20,00,000 |
|
Uncertified work |
Rs.10,00,000 |
Surveyor’s estimation of work completed:
|
Direct labour |
50% |
|
Direct materials |
80% |
|
Overheads |
50% |
|
Materials sent to site |
Rs.5,00,000 |
|
Labour |
Rs.2,80,000 |
|
Overhead |
Rs.3,20,000 |
|
Materials in hand |
Rs.1,00,000 |