Question:
M/s Verma Building Contractors began to trade on 1 January 2009. The following was the expenditure on contract for Rs. 9,00,000.
|
|
|
Materials issued from stores
|
2,25,000
|
|
Materials purchased
|
60,000
|
|
Plant installed at cost
|
1,05,000
|
|
Wages paid
|
3,60,000
|
|
Direct expenses paid
|
33,000
|
|
Establishment expenses
|
30,000
|
|
Direct expenses accrued due
|
4,500
|
|
on 31 December 2009
|
|
|
Wage accrued due on
|
3,000
|
|
31 December 2009
|
|
Of the plant and materials charged to the contract, the plant which cost Rs. 7,500 and materials costing Rs. 6,000 were lost. Some parts of the materials costing Rs. 3,750 were sold at a profit of Rs. 750. On 31 December 2009 the plant which cost Rs. 3,000 was returned to stores and the plant which cost Rs. 2,250 was transferred to some other contract.
The work certified was Rs. 7,20,000 and 80%of the same was received in cash. The cost of work done but uncertified was Rs. 4,500. Charge depreciation on plant was at 10%p.a. You are required to prepare the contract account for the year that ended on 31 December 2009, by transferring to P&L A/c the portion of profit, if any, you consider reasonable.