Bridge Builders Ltd undertook a contract to build a pedestrian footbridge for a fixed price of £400,000 during the period from May Year 1 to July Year 2. This table sets out transactions up to the company’s year end in December, Year 1.
|
Transactions during Year 1: |
£000s |
|
|
May |
Materials purchased and delivered to site |
91 |
|
May |
Equipment delivered to site |
14 |
|
July |
Architect’s fee |
7 |
|
June–Dec |
Materials issued from store |
76 |
|
May–Dec |
Wages paid on site |
71 |
|
Sept |
Payment to subcontractors |
10 |
|
May–Dec |
Direct costs |
22 |
|
Dec |
Head office charges |
6 |
|
At the end of Year 1 |
|
|
|
Dec |
Value of equipment remaining on site |
9 |
|
Dec |
Value of material remaining on site |
15 |
|
Dec |
Sales value of work certified |
280 |
|
Dec |
Amount due to subcontractors |
3 |
|
Dec |
Direct costs incurred but not yet paid |
3 |
Required:
(a) Prepare relevant ledger account records.
(b) Prepare a statement of contract profit for Year 1.