Prepare the contract account, Financial Accounting

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: 2/19/2013 7:21:51 AM | Location : United States







Related Discussions:- Prepare the contract account, Assignment Help, Ask Question on Prepare the contract account, Get Answer, Expert's Help, Prepare the contract account Discussions

Write discussion on Prepare the contract account
Your posts are moderated
Related Questions
assignment ofr p V RATIO ANALYSIS

Introduction to Pension funds Pension funds are normally set up to provide pension benefits to employees who have retired. The pension funds receive contributions mainly from e


The following are the three-month HIBOR and three-year EFN futures prices for September 2010 contracts.   a Determine the HIBOR in three-months for settling the futures


The forecast income statements are as follows: WORKINGS Sales = 50000 × 1·12 = $56000000 Variable cost of sales = 30000 × 1·12 × 0·85 = $28560000 Fixed cost of sa

1a. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods p

The following facts pertain to a noncancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. Inception date: May 1, 2012 Annual lease payment due at th

A) Suppose you have two stocks (A and B) in your portfolio, worth $400,000 and $600,000 respectively. The annual volatility is 0.30 and 0.35 respectively. The correlation between t

zorn conducted his professional practice through zorn, inc. the corporation uses a fiscal year ending september 30 even though the business purpose test for a fiscal year cannot be