Reference no: EM133108945

Question - On the 1st May, Nkandla Ltd undertook a contract for R680,000. Nkandla incurred the following expenses during the year:

Materials issued from stores 65,000

Materials purchased for the contract 30,000

Plant installed at cost 42,000

Wages paid 105,600

Wages accrued due on the 31st Dec 31,500

Direct expenses paid 27,300

Direct expenses accrued due 31st Dec 1,700

Establishment 5,800

Notes: Of the plant and material charged to the contract, the plant which cost R2,000 and materials costing R1,500 were lost. Some of the materials costing R3, 000 were sold for R3, 900. On the 31st Dec, the plant which cost R200 was damaged, rendering itself useless. The work certified was R240, 000 and 80% of the same was received as cash. The cost of work done but uncertified was R1, 000. Depreciation on plant was charged at the rate of 10% per annum.

Required - Prepare the contract account for the year ended 31st December.