ofa bullding fr 10,099 costo Of plete by the ace conttined as com Hes pat Machinery ue ee dered 19 De 0F%20,000, and ma? as consi erg the year totalled €4 qq att cortege car had cost 813,000 thy evarot foto ota A ecu page contracts. The flowing pani ae ‘on 31 March 2024. eg e 1.434000 asian an iti ie 11,300 cai eee ecu 8.209 cae ia eis $480) paring al “a0 a sas “ane dee F Eel 031 March 2024 Une ane r He Di en on 31 Nach 024 ‘on ee asa al Abe Prem o tM om eee acaee 1,30,000 etree ee larch 2024 and find out the. repare a Coirct Account forthe period ending 31 March 2 Cee te ete 26 oF ee rot on sak Hank 10 Pe 2. The Hindustan Construction Co. Ltd has undertaken the construction of a bridge over Ie tans Mill Cperation, The vac of the contett sa. shel sreshn 20a ne or arte cl ed Soe of ot aio eprovl of he Crporsons engine The following ae the deals eon ines on 3 ne 205 Work Cost of wo pram installed va of plant 8 e 4,05,000 4,20,000 81,200 lant (plant upkeep account) iat lt allo 23,000 at located tothe contract atid ee Weasseedon30 Janse wane Ditectexpensee no 2023 ely don 30 June 2093 Mis Se Aa lye cect at gon the mun noun ceiteg| athe the Corporation” Sires on ascyy PMS Engines Labour onsite Materials direct to site less retums Materials from stores Hite and use of Diteet expenses General overhe Materials on hare (a) Contract Accoun, rept he Balance Sheet." ( Contracts, onstruction Lt is engaged on ‘* ars are obtained tous got con p a puta otic! coun is * #4 (6) show hove it would acts 4 Bs ‘and 8 "December “Ng the year. The follows following pate of Commencement ce Tied iene e 1 September 600,000 wy 1 : trials ons 31 December ton ‘0.00 Direct labour 2,000 2,000 Direct expenses 150,000 8,000 Establishment expenses 6,000 42,000 Plant installed at cost 25,000 35,000. Value of plant (31 December) 80,000 ioe Cost of contract not yet certified 65,000 eae Value of contract certified 23,000 soe Cash received from contractees 4,20,000 rast Architects fees 3.78,000 125,000 During the period, materials amountin zou 1,000 dae etn aed Ant 1,00 te benaseed on sna 1: (a) Contract aos a (@) Eotracts SromalSlancs sheet agen sient ene Srranciepemes , clearly showing the calculation contract price Materials issued Materials returned, firm of contractors undertook three contracts on | April 2020, 1 Ociober 2020 and 1 Jay 2021. On 31 March 2021, when ther acount were made up, the poston was ? u ML z z z Contract P: 4,00,000 1,35,000 —1,50,000 Materials 72,000 29,000 10,000 Wages 1,10,000 56,200 7,000 General expenses 4,000 1,400 500 Plant 20,000 8,000 6,000 Materials.on hand 4,000 2,000 1,000 3,400 1,800 800 2,00,000 80,000 18,000 1,50,000 60,000 13,500 6,000 4,000 1,050 600 200, LON ive dates of the contract and depreciation Wages outstanding Work certified Cash received Work uncertified General expenses outstanding The plants were installed on the respect E is taken at 10% p.a. Prepare coe ect a sewerage treatment plant for . Mis Sewers Ltd undertook a contract raed that the contract seller ‘e204 lakh, It was exPé meat A lll fo py 002, Yee peso account for the year ending 31 January auring the period, materials amo, 501 © contract 601. The dae gp nd contract number 601 ig 9, fem Construction Ltd has taken ey Sep. You ane 10 cont 4 bg ehe contracts on 30 September 299) 2™2C%s on Contract price Materials Wages paid Other expenses Plant at site Unused materials at site Wages payable Other expenses due Work certified Cash received Work completed but not yet certitied The plant at site is to be depreciated at 10% respect of each work showing the notional pi transferred to Profit and Loss Account. 1s a5 fottowes Pt 2020. The position Contact 1 z 27,00,000 5,80,000 11,24,000, 28,000 160,000 40,000 36,000 4,000 16,00,000 12,00,000 _ 22,50,000 '80,000 90,000 Prepare the contract account in rofit and also the profit to be (CS Inter) Contract 11 z 60,00,000 10,80,000, 16,50,000 60,000 3,00,000 60,000 54,000 9,000 30,00,000 10, The following was the expenditure on a contract for %6,00,000 that commenced in February 2021: Materials €1,20,000; Wages T1,64,400; Plant %20,000; Business charges %8,600; Cash received on account to 31-12-2021 amounted to %2,40,000 being 80% of work certified; the value of materials on hand at 31-12-2021 was %10,000. Prepare the Contract Account for 2021 showing the profit to be credited to the year’s P&L Alc. Plant is to be depreciated at 10%. 11, The following is a summary of the expenditure on a contract up to 31 December 2021: z 6,900 34,000 3,800 500 6,300 12,300 Direct wages Direct materials Stores issued Stores returned Sub-contractor costs Plant 0 ie The following additional information is supplied te ee eee cate (a) The contract began in 2021 and the contract ue fs ae (© The architect had certified that 4/5th of the con December 2021. (©) Depreciation on plant upto 15 (4) The summary set out below ine! 2021, pleted on 15 4 0. aber 2021 is C800: secember es" ng tothe peri Judes items relatiBont 2 costing sug — contract NO. 902, having ag, loge xd conracte® PAYS 80% of qe MA Prog op " st Secember 2021 nate bet ged eon that dae were velucg oS, rounting to %600 incurred on «32000. Pr se 12h on cost, 8 Contras Net e ores and manna Prepare Contract No. 992 a, ‘04 for depreciation cp ott costs hich credit may properly be rayon" SMOWing the of al plans and Seesuction company on 31 Deak ‘fiom of bullding contractors bey, 021 an ber 2934, 4 Pre the ye fompany 98 enEaKed on only grs® HUE on 1 i jant and materials charged ta qree-co""8et, The, ite. the thick st ©4000 were fost ina setae the pa i Yecember Secident, 2023," sot done bat rac eMe heh D tatu ered was Cy ae 0 seme he sto Oa Iaetas coming C0 een ie Sheet from the following Trial Balance on 31 Decor ge cnt Aouad the Bal Jecember 2021 a 'o acne r : i Creditors = 1,20,000 Cash received on contract (80% = 10,900 Yo of work certifies i 3 Land, buildings, ete ork certified) 2,00,000 ji Bank balance 43,000: = | Charged to contract ee — Mater fi a 90,000 a3 Se 25,000 * ages 1,40,000 ‘Dtract Expenses o Tater) Pe 7,000 sal & 330,000 3,30,000 1S, Compute a conservative estimate of profit on a contract (which has been 80% complete) fiom the following particulars. Illustrate four methods of computing the profit: z Total expenditure to date qsgn.o0o Estimated further expenditure to complete 34,000 the contract (including contingencies) ed oce Contract price 2/00,000, Work certified 17,000 Work not certified 163,200 (CA Inter) Cash received in respect of & the financial result in tespect o undertaken by a firm in River Valley extracted from the financial “of the covered floor area as ineering authorities of the Jeounts form, buildings the following figures is €10 per sath etent engi 16. Work out, in a suitable Cost Ac = contract for construction of tempor Project. Your answer should be ares be F books of the firm, The termof the Con amp accepted and certified to be corrert PY Project, aeicoot company undertook a c sje year ended 31 March 2023, m1 Aprij 2022 008 Of 8 large buil the folheeetilding complex. Th ‘ing data are availabe for available for for contract Price Work Certified Materials Issued to Site yi Penning & Estimating Go sts Direct Wages Paid eae ‘Materials Returned from Site 1000 et ee ies Wage Related Costs 250 Site Office Costs 1,750 Heads Office Expenses Ay 00 *s Apportic Direct Expensen nce gene ia ore Work Not Certified a8 902 The contractors own ney weenie See He conan eh tally coved 20 ak ad as brn year. The residual vale ofthe plant after 5 years of life is expec Peat Nae pected to be 5. lakh. Straight line method of ‘As on 31 March 2023, the dire the direct wa wpemateia a ste were estimated €200000, 0 nanntle ™arOand Required: fa (j) Prepare the contract account for the year ended 31 March 2023 (i) Show the calculation of profit ses profit to be taken to the profit and loss account of the (ii) Show the relevant balance sheet entries (CAinter) 2. R K Builders obtained @ contract to construct building for €} crore, Building work Gommenced on 1 October 2020 and at the close of financial year as on 31 March So2L, the construction was stil in progress. The following information 1s avaiable: (a) Party paid 1.20 crore, being 80% ‘of the amount as per Surveyor's Certificate of work completed as on 31 March 2021 (6) Total cost as per Contract Account after adjustment of; closing work-in- progress was €1.35 crore: As a prudent accountant, determine the ence of profit R K Builders are justified in taking to the eredit of their Profit rand Loss Account. (CS inter) ANSWERS Objective Type Questions State whether the following statements 27° ‘True or False: True — 1, 2, 6, 7,9 False —3,4,5+8510 Practical Questions 1. Transfer to P&L A/e 215,000 ‘ofthe contract, Hence I (Hint: Work certified is less than hal on cash basis has been transfer 235,000. 3 of the profit,