M/s Rajesh and Co. commenced work on a particular contract on 1 April 2009. They closed their books of accounts for the year on 31 December each year. The following information is available from their closing records on 31 December 2009:
|
Materials sent to site |
1,00,000 |
|
Foreman’s salary |
24,000 |
|
Wage paid |
2,00,000 |
A machine consisting Rs. 64,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs. 4,000. A supervisor is paid Rs. 4,000 p.m. and had devoted one-half of his time on the contract.
All other expenses were Rs. 30,000. The material on site was Rs. 18,000. The contract price was Rs. 8,00,000 on 31 December, 2/3rd of the contract was completed. However, the architect gave certificate only for Rs. 4,00,000 on which 75%was paid.
Prepare the contract account in the company’s books.