Model: Actual & Estimate Contract Particulars—Ascertainment of Profit.
VPR Ltd commenced a contract on 1 January 2009. The total contract was Rs. 40,00,000 (estimated by the contractee) and was accepted by VPR Ltd at 10% less. It was decided to estimate the total profit and take to the credit of P&L A/c that the proportion of estimated profit on cash basis which the work completed bore to the total contract price. Actual expenditure in 2009 and estimated expenditure in 2010 are given as follows:
|
2009 Actual Rs. |
2010 Estimated Rs. |
|
|
Materials |
6,00,000 |
10,40,000 |
|
Labour: Paid |
4,00,000 |
4,80,000 |
|
Accrued |
40,000 |
– |
|
Plant purchased |
3,20,000 |
– |
|
Expenses |
1,60,000 |
– |
|
Plant returned to store (on cost) |
80,000 |
2,00,000 |
|
on 31 December 2009 |
on 30 September 2010 |
|
|
Materials at site |
40,000 |
– |
|
Work certified |
16,00,000 |
Full |
|
Work uncertified |
60,000 |
– |
|
Cash received |
12,00,000 |
Full |
The plant is subjected to annual depreciation @ 20% of cost. The contract is likely to be completed by 30 September 2010. You are required to prepare the contract Account.