1. The following information relates to contract NO. X300. Prepare the Contract Account.

Direct materials	45,600
Direct wages	24,400
Special plant	18,400
Store issued	6,040
Loose tools	3,560
Expenses of Tractor: Running materials Wages of drivers etc.	3,500 4,540
Other direct charges	2,560

The contract was completed in 26 weeks at the end of which the plant was returned subject to depreciation at 15% p.a. on the original cost. The value of loose tools and stores returned were BDT. 2,260 and BDT. 840 respectively. The value of tractor was BDT. 40,000 and depreciation was to be charged to this contract at 20% p.a. Administration expenses at 10% on total work cost. The contract price was BDT. 1,25,000.

2. Nafee & Co. Ltd. undertook a contract for erecting a sewerage treatment plant for a city for a total value of Rs. 24 lakh. It was expected that the contract would be completed by 31^st March 2020. You are required to prepare a contract account for the year ending 31^st December 2019 from the following particulars:

Materials	3,00,000
Wages	6,00,000
Overheads	1,20,000
Special plant	2,00,000
Depreciation @ 10% to be provided on plant.
Materials lying at site on 31.12.2019 Rs. 40,000.
Work certified was to the extent of Rs. 16,00,000 and 80% of the same was received in cash.
5% of the value of material issued and 6% of wages may be taken to have been incurred for the portion of the work completed but not yet certified.
Overheads are charged as a percentage of direct wages. Ignore depreciation on plant for use on an uncertified portion of the work. Ascertain the amount to be transferred to Profit & Loss A/c on the basis of realized profit.

Answer rating: 100% (QA)

Contract accounts for both the abovementioned questions are given below with working notes after eac... View the full answer