Question: A contractor commenced the work on a particular contract on 1st April, 2016 he usually closes his books of accounts for the year on 31st

A contractor commenced the work on a particular contract on 1st April, 2016 he usually closes his books of accounts for the year on 31st December of each year. The following information is revealed from his costing records on 31st December, 2016.

Materials sent to site 43,000

Jr. Engineer 12,620

Labour 1,00,220

A machine costing ` 30,000 remained in use on site for 1/5th of year. Its working life was estimated at 5years and scrap value at ` 2,000

A supervisor is paid ` 2,000 per month and had devoted one half of his time on the contract.

All other expenses were `14,000 the materials on site were ` 2,500.

The contract price was ` 4,00,000. On 31st December, 2016 2/3rd of the contract was completedhowever, the architect gave certificate only for ` 2,00,000. On which 80% was paid. Prepare ContractAccount.

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Profit for the contract amounts to 66905 Prepare the contract account as follows The result ... View full answer

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