Two contracts were commenced on the following months: 1 January and 1 July 2009. Their accounts as on 31 December 2009 showed the following:
|
Contract I Rs. |
Contract II Rs. |
|
|
Contract Price |
16,00,000 |
10,80,000 |
|
Expenditure: |
||
|
Raw materials |
2,88,000 |
2,32,000 |
|
Wages paid |
4,40,000 |
4,49,600 |
|
General charges |
16,000 |
11,200 |
|
Plant installed |
80,000 |
64,000 |
|
Materials in hand |
16,000 |
16,000 |
|
Wages accrued |
16,000 |
16,000 |
|
Work certified |
8,00,000 |
6,40,000 |
|
Work finished but |
24,000 |
32,000 |
|
uncertified |
||
|
Cash received for |
6,00,000 |
4,80,000 |
|
work certified |
The plane was installed on the date of commencement of each contract, and depreciation is to be taken at 10%per annum.
Prepare the contract accounts and show how they would appear in the Balance Sheet as on 31 December 2009.
Three contracts were commenced on the following months: 1 January, 1 July and 1 October 2009. They were undertaken by a contractor and their accounts as on 31 December 2009 showed the following:
The plant was installed on the date of commencement of each contract. Depreciation is to be taken at 10%p.a. You are required to prepare profit contract accounts.