Model: Profit to be taken to P & L A/C Different methods
An expenditure of Rs. 3,88,000 has been incurred on a contract to the end of 31, March 2010. The value of work certified is Rs. 4,40,000. The cost of work done but not yet certified is Rs. 12,000. It is estimated that the contract will be completed by 30 June 2010, and an additional expenditure of Rs. 80,000 will have to be incurred to complete the contract. The total estimated expenditure on the contract is to include a provision of 2½%for contingencies. The contract price is Rs. 5,60,000 and Rs. 4,00,000 has been realized in cash upto 31 march 2010.
You are required to calculate the proportion of profit to be taken to the profit and loss Account as on 31 March 2010 under different methods.