JJ Construction Limited has taken two contracts on 1st March 2020. The position of contracts as...

 

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JJ Construction Limited has taken two contracts on 1st March 2020. The position of contracts as on 28 February 2021 was as follows: Particulars Contract price Materials Contract 1 R2 700 000 R580 000 R1 124 000 R28 000 R160 000 R40 000 Wage payable R36 000 Other expenses due R4 000 Work certified R1 600 000 Cash received R1 200 000 Work completed but not yet R80 000 certified Wages paid Other expenses Plant at sites (cost) Unused material at site The plant at site is to be depreciated at 10%. Contract 2 R6 000 000 R1 080 000 R1 650 000 R60 000 R300 000 R60 000 R54 000 R9 000 R3 000 000 R2 250 000 R90 000 Required: Prepare the contract account in respect of each contract showing the notional profit and the profit to be transferred to P&L a/c. JJ Construction Limited has taken two contracts on 1st March 2020. The position of contracts as on 28 February 2021 was as follows: Particulars Contract price Materials Contract 1 R2 700 000 R580 000 R1 124 000 R28 000 R160 000 R40 000 Wage payable R36 000 Other expenses due R4 000 Work certified R1 600 000 Cash received R1 200 000 Work completed but not yet R80 000 certified Wages paid Other expenses Plant at sites (cost) Unused material at site The plant at site is to be depreciated at 10%. Contract 2 R6 000 000 R1 080 000 R1 650 000 R60 000 R300 000 R60 000 R54 000 R9 000 R3 000 000 R2 250 000 R90 000 Required: Prepare the contract account in respect of each contract showing the notional profit and the profit to be transferred to P&L a/c.

Answer rating: 100% (QA)

Lets calculate the notional profit and profit to be transferred to the profit and loss account for each contract Contract 1 Contract Price R2700000 Co... View the full answer