Reference no: EM132617568
National Construction Company undertook a building construction project on January 01, 2019 and incurred following expenditures on it during 2019.
Following is the summary of accounts related to this project. Rs.
Materials directly purchased 100,000
Materials issued from the store 30,000
Plant purchased 100,000
Wages 120,000
Direct expenses 20,000
Proportion of establishment Charges 30,000
The contract was for Rs. 7,00,000 and up to Dec.31, 2019 Rs. 4,00,000 had been received in cash which represented the full amount of work certified less 20% retention money. The materials on site unconsumed were valued at Rs. 20,000. The contracting plant has zero residual value and to be depreciated over the five years.
Required:
Problem 1: Prepare the Contract Account showing what profit thereon has earned to date. Also state what amount should in your opinion, be taken into profit and loss of the period.