financial managemant, Financial Management

Task - 01

During its financial year ended 30 June 20x7 Beavers Ltd, an engineering company, has worked on several contracts. Information relating to one of them is given below.

Contract X201
Date Commenced 1 July 20X6
Estimated Completion Date 30 Sept 20X7
Contract Price RO 240,000
Proportion of work certified as satisfactorily completed (and invoiced) up to June 20X7 RO 180,000
Amount received from contractee RO 150,000
Costs up to 30 June 20X7
Wages RO 91,000
Material sent to site RO 36,000
Other contract costs RO 18,000
Proportion of head office costs RO 6,000
Plant and equipment transferred to the site (at book value on 1 July 20X6) RO 9,000
The plant and equipment is expected to have a book value of about RO 1,000 when the contract is completed.
Stock of materials at site on 30 June 20X7 RO 3,000
Expected additional costs to complete the contract
Wages RO 10,000
Materials (including stock at 30 June 20X7) RO 12,000
Other (including head office costs) RO 8,000
Company policy is to recognize profit on contracts as follows
Profit to be recognized = {Value of work certified / Total contract value} x Estimated total
Contract Profit

a) Prepare the Contract account.
b) The profit to be recognized on the Contract to date.
c) The amount to be shown on the company balance sheet as at 30 june 20X7 in respect on Contract X201 are:
a. Stocks
b. Debtors
Posted Date: 11/19/2012 11:10:08 PM | Location : Oman







Related Discussions:- financial managemant, Assignment Help, Ask Question on financial managemant, Get Answer, Expert's Help, financial managemant Discussions

Write discussion on financial managemant
Your posts are moderated
Related Questions
CHARACTERISTICS AND EFFECTS OF SAPS Although SAPs differ somewhat from country to country, they typically have the following features: Reduction in Trade Barriers SAP’s r

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Cash vs. Accrual Accounting: While it is beyond the scope of this module to assess accounting systems against all types of accounting styles, it is important that managers unde

Briefly outline the necessities of the UK version of ISA 700/ 750/ 706 and discuss the factors which would manipulate you as the external auditor in forming an opinion on the finan

The NPV decision rule needs that a company invest in all projects that have a positive net present value. This presumes that sufficient funds are available for all incremental proj

Q. Credit Analysis for Formulation of Optimum Credit Policy? Credit Analysis: - Credit Analysis is made to estimate the credit worthiness of the customers before making credi

what is the rand corporation five project rank

Time Series and Demand Forecasting   The process of budgeting in many organizations starts with a forecast of demand for the products in the forthcoming year and the sales f

Home Inc. is considering buying a new piece of equipment, which will cost $715,000 and has an economic life of 5 years, in order to produce a new line of product.  The company beli

Need for Credit and its nature On the demand side of the economy are the consumers of goods and services who require funds basically for acquiring certain consumer durables. Th