Rajendra undertook a contract 20,00,000 on an arrangement that 80% of the value of work done,...

 

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Rajendra undertook a contract 20,00,000 on an arrangement that 80% of the value of work done, as certified by the architect of the contractee should be paid immediately and that the remaining 20% be retained until the Contract was completed. In Year 1, the amounts expended were 8,60,000, the work was certified for 8,00,000 and 80% of this was paid as agreed. It was estimated that future expenditure to complete the Contract would be 10,00,000. In Year 2, the amounts expended were 4,75,000. Three-fourth of the work under contract was certified as done by December 31st and 80% of this was received accordingly. It was estimated that future expenditure to complete the Contract would be *4,00,000. In Year 3, the amounts expended were 3,10,000 and on June 30th, the whole Contract was completed. Show how Contract revenue would be recognized in the P & L A/c of Mr. Rajendra each year. Rajendra undertook a contract 20,00,000 on an arrangement that 80% of the value of work done, as certified by the architect of the contractee should be paid immediately and that the remaining 20% be retained until the Contract was completed. In Year 1, the amounts expended were 8,60,000, the work was certified for 8,00,000 and 80% of this was paid as agreed. It was estimated that future expenditure to complete the Contract would be 10,00,000. In Year 2, the amounts expended were 4,75,000. Three-fourth of the work under contract was certified as done by December 31st and 80% of this was received accordingly. It was estimated that future expenditure to complete the Contract would be *4,00,000. In Year 3, the amounts expended were 3,10,000 and on June 30th, the whole Contract was completed. Show how Contract revenue would be recognized in the P & L A/c of Mr. Rajendra each year.

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