Prepare the contract account, Financial Accounting

Assignment Help:

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


Related Discussions:- Prepare the contract account

Which inventory methods should used, 1) Which inventory methods are used by...

1) Which inventory methods are used by Lowe's? (Mark all that apply.) a. Weighted-average b. FIFO c. LIFO d. Dollar-value LIFO e. Retail LIFO f. Retail Dollar-value LIFO g. If mult

Defence of trustee-breach of trust-trusts laws, Defence of trustee   1) He...

Defence of trustee   1) He may be relieved from liability if, in the opinion of the court, he acted honestly and reasonably and ought to be excused; 2) He may also be released

Duties of trustees-trusts laws and accounts, DUTIES OF TRUSTEES 1) Not ...

DUTIES OF TRUSTEES 1) Not to profit from the trust : A trustee may not receive remuneration except: By order of the court, if the trust is very onerous or the services of the

How accounting objectives can be achieved, How Accounting objectives can be...

How Accounting objectives can be achieved There are two main ways by which this can be achieved: All the accounting records are maintained at the head office; or Each

What was wasser''s capital balance at the end of 2011, Cleary, Wasser, and ...

Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) in

What is the minimal variance, Consider the expected return and standard dev...

Consider the expected return and standard deviation of the following two assets: Asset 1: E[r1]=0.1 und σ1=0.3 Asset 2: E[r2]=0.2 und σ2=0.4 (a) Draw (e.g. with Excel) the

Evaluate the earnings per share, Q. A ltd. Company has equity share capital...

Q. A ltd. Company has equity share capital of Rs. 5,00,000 divided into shares of Rs. 100 each. It wishes to gain further Rs. 3,00,000 for expansion cum modernization plans. The co

Pre-acquisition dividends, Pre-acquisition dividends Pre-acquisition di...

Pre-acquisition dividends Pre-acquisition dividends may also arise in the following situations; 1 ) Where the holding company acquires the subsidiary company’s shares cum-div

Research and development, Research and Development (R&D) - Research is a pl...

Research and Development (R&D) - Research is a planned activity aimed at discovery of new knowledge with hope of developing new or improved services andproducts. Development is the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd