A company undertook a contract for construction of a large building complex. The construction work commenced on 1st April 2005 and the following data are available for the year ended on 31st March 2006.
|
Particulars |
Amount |
|
|
|
Rs.000s |
|
|
Contract price |
35,000 |
|
|
Work certified |
20,000 |
|
|
Progress payment received |
15,000 |
|
|
Materials issued to site |
7,500 |
|
|
Planning and estimating costs |
1,000 |
|
|
Direct wages paid |
4,000 |
|
|
Materials returned from site |
250 |
|
|
Plant hire charges |
1,750 |
|
|
Wages related costs |
500 |
|
|
Site office costs |
678 |
|
|
Head office expenses apportioned |
375 |
|
|
Direct expenses incurred |
902 |
|
|
Work not certified |
149 |
|
The contractors own a plant which originally cost Rs.20 lakhs has been continuously in use in this contract throughout the year. The residual value of the plant after 5 years of life is expected to be Rs.5 lakhs. Straight line method of depreciation is in use. As on 31st March 2006, the direct wages due and payable amounted to Rs.2, 70, 000 and the materials at site were estimated at Rs.2, 00,000.
Required:
[a] Prepare the contract account for the year ended 31st March 2006
[b] Show the calculation of profits to be taken to the Profit and Loss A/c of the year
[c] Show the relevant Balance Sheet entries.