XYZ contractors obtained a contract to construct a house for Rs.8,00,000. Work was started on 1st January, 2010 and it was estimated that contract would take 15 months to complete. Work is proceeding as per schedule and the details upto 31st December 2010 are as follows:
|
|
Rs |
|
Materials and stores |
1,87,000 |
|
Wages Paid |
2,70,000 |
|
Plant hire charges and other expenses |
60,000 |
|
Establishment charges |
54,000 |
|
Material unused |
11,000 |
|
Work Certified |
6,00,000 |
|
Cash received |
5,40,000 |
|
Work not yet certified (at cost) |
20,000 |
It is further estimated that the following further expenses will be required to complete the work:
Additional material: Rs.25,000; Wages : Rs.20,000; Sub Contract cost : Rs.50,000;
Plant hire charges : Rs.10,000; Establishment Expenses : Rs.11,800; and provision for contingencies : 5% of total cost
You are required to calculate the value of Work in Progress as on 31st December 2010 taking credit for a reasonable profit and also show the contract account.