SV construction Ltd. have obtained a contract for construction of a bridge. The value of the contract is Rs. 12 lakhs and the work commenced on 1st October, 2001. The following details are shown in their books for the year ending 30th September 2002.

Life of plant purchased is 5 years and scrap value is nil. 

1. Prepare the contract account for the year ending 30th September, 2002 

2. Show the amount of profit which you consider might be fairly taken on the contract and how you have calculated it.

Transcribed Image Text:

Plant purchased Wages paid Material issued to site Direct expenses General overheads apportioned Wages accrued as on 30.9.2002 Materials at site as on 30.9.2002 Direct expenses accrued as on 30.9.2002 Work not certified at cost Cash received being 80% of work certified Rs. 60,000 3,40,000 3,36,000 8,000 32,000 2,800 4,000 1,200 14,000 6,00,000