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
Clarity and transparency The terms of the payment package must be clear and transparent so that directors and shareholders are in no doubt as to when rewards have been earned o

1) The detailed information is on the second tab marked "Financials". Enter summarized Balance Sheet and Income Statement information for Cummins into the template on the "Summary

State the Benefits of accounting information Benefits of accounting information ultimately decline. Cost of providing information, though, will rise with every additional piec


Write at least 7 full pages that analyzes the internal and external environments for your organization. This paper must be in essay form. [If you have formatting questions, refer t

Limited Liability Company (LLC) - Form of doing business combining limited liability for all owners (known as members) with taxation as a PARTNERSHIP. An LLC is formed by filing AR

What is the present value of $500 per year for ten years at 12 percent, assuming a regular, or ordinary annuity?

In order to enhance sales from their present annual $35 million, ABC Company, a retailer, is considering more liberal credit standards. Presently, the firm has an average collectio

Which of the following actions are most likely to directly increase cash as shown on a firm's balance sheet? Explain and state the assumptions that underlie your answer. 1. It i

Dillings Ltd is a wholesaler and distributor of catering of office equipment. The following list of balances was extracted from its books at 31 March 2004: 1428_Prepare the Income