A contractor commenced work on a particular contract on 1st April, 2001. He closes the books of accounts for the
A contractor commenced work on a particular contract on 1st April, 2001. He closes the books of accounts for the year on 31st December of each year. The following information is revealed from his costing records on 31st December, 2001.
A machine costing Rs. 30,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 year and scrap value at Rs. 2,000.
A supervisor is paid Rs. 2,000 per month and had devoted half of his time on contract.
All other expenses were Rs. 14,000. The materials on site were Rs. 2,500. The contract price was Rs. 4,00,000. On 31st December, 2001, 2/3rd of the contract was completed. However, the architect gave certificate only for Rs. 2,00,000 on which 80% was paid. Prepare contract account.
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