Reference no: EM132644641

Point 1: A machine costing ? 2,60,000 has been on the site for 146 days, its working life is estimated at 7 years and its final scrap value at ? 15,000.

Point 2: A supervisor who is paid ? 8,000 p.m. has devoted one-half of his time to this contract.

Point 3: All other expenses and administration charges amount to ? 1,36,500.

Point 4: Material in hand at site costs ? 35,400 on 31st December 2011

Point 5: The contract price is ? 20,00,000. On 31 December 2011 two-third of the contract was completed. The architect issued certificates covering 50% of the contract price, and the contractor has been paid ? 7,50,000 on account.

Problem 1: Prepare a contract account and show how much profit or loss to be attributed to the financial accounts to 31 December 2011 two-third of the contract was completed.