A firm of building contractors began to trade on 1st January, 2010. During the year, the company
Question:
A firm of building contractors began to trade on 1st January, 2010. During the year, the company was engaged on only one contract. The contract price was Rs.50,00,000.
Of the plant and materials charged to the contract, the plant which cost Rs.50,000 and materials which cost Rs.40,000 were lost in an accident.
On December 31, 2011, the plant which cost Rs.50,000 was returned to the stores the cost of work done but uncertified was Rs.20,000 and the materials costing Rs.40,000 were in hand on site.
Charge 10% depreciation of the plant, carry forward by way of reserve one third of the profit received and compile the Contract Account and the Balance Sheet from the following Trial Balance on December 31, 2011.
Rs | Rs | |
Share capital | 12,00,000 | |
Creditors | 1,00,000 | |
Cash received on contract (80% of work certified) |
| 20,00,000 |
Land, buildings, etc. | 4,30,000 | |
Bank balance | 2,50,000 | |
Charged to contract | ||
Materials | 9,00,000 | |
Plant | 2,50,000 | |
Wages | 14,00,000 | |
Expenses | 70,000 | |
33,00,000 | 33,00,000 |
Expert Answer:
The Contract Account for the year ending December 31 2011 can be compiled as follows Rs Rs To Materi... View the full answer
