Wajonzi limited has been awarded a contract to contract a building block. The contract price is ksh 20,160,000. The following information relates to the contract for the year ended 31 December 2019.

plant purchased                                                2,500,000

material on site (1 January 19)                        1,260,000

sub-construction fee                                         150,000

construction permit fee                                     50,000

salaries and wages paid                                     840,000

direct expenses paid                                          1,320,000

materials purchased                                          1,600,000

materials returns to store                                  810,000

materials at site (31 December 19)                   500,000

work certified                                                       6,300,000

Additional information;

• The value of work done but not certified was ksh 2,200,000
• The firm depreciate plant at 20% per annum on cost
• The wages paid include ksh 52,000 relating to the year 2020
• The firm takes 25% of the notional profit 
• The contract relation monies is 20%

1. Prepare contract account for the year ended 31 December 2019
2. Prepare a contractee account

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