A contractor, who prepares his account on 31 st December every year, commenced a contract on 1 st April, 2013. The costing records relating to the said contract reveal the following information on 31 st December, 2013. M

CS Executive · Cost and Management Accounting · PYQS · June 2014
A contractor, who prepares his account on 31 st December every year, commenced a contract on 1 st April, 2013. The costing records relating to the said contract reveal the following information on 31 st December, 2013. Material charged to site: ₹1,58,500 Direct labour: ₹2,60,500 Salary of accountant: ₹79,500 Plant costing ₹1,60,000 has been on site for 73 days. Its working life is estimated at five years and the final scrap value at ₹15,000. A supervisor, who is paid ₹20,000 p.m., has devoted approximately one fourth of his time to this contract. The administrative and other expenses amounted to ₹1,00,000. Material in hand at the site on 31.12.2013 costs ₹15,400. Some of the material costing ₹4,500 was found unsuitable and was sold for ₹4,000 and part of the plant costing ₹5,500 (on 31.12.2013) unsuited to the contract was sold at a profit of ₹2,000. The contract price was ₹15,00,000. On 31.12.2013, two-third of the contract was completed but architect's certificate has been issued covering 50% of the contract price. The contractee has paid ₹6,00,000 so far on account. Prepare contract account and show how these accounts would appear in the balance Sheet as on 31.12.2013.

Topics: Contract Costing

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