financial managemant, Financial Management

Assignment Help:
Task - 01

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:- financial managemant

Why do financial managers calculate the marginal tax rate, Why do financial...

Why do financial managers calculate the marginal tax rate? Financial managers make use of marginal tax rates to estimate the future after-tax cash flows from investments. As th

Delivery and credit risk, When a borrower uses repo market for fund f...

When a borrower uses repo market for fund financing, he has to deliver the securities to the lender. One way to do this is to deliver the collateral to the lender

Explain the post-acquisition integration plan, Explain the Post-acquisition...

Explain the Post-acquisition integration plan Post-acquisition integration plan Keep  all  channels  of communications open,  by  includin

Determine the significance of gearing on shareholders, Determine the Signif...

Determine the Significance of gearing on shareholders Significance of gearing on shareholders is financial risk for anun-geared and geared company. It means that there is a gre

Calculate the exchange exposure faced by the u.s. company, A U.S. company h...

A U.S. company holds an asset in France and faces the subsequent scenario:     State 1 State 2  State 3  State 4

Examine the difference between explicit and implicit cost, Examine the diff...

Examine the difference between Explicit Cost and Implicit Cost Cost of capital can be either implicit cost or explicit. Explicit cost of any source of capital is the discount r

Define forward exchange rate will be an unbiased predictor, Explain the con...

Explain the conditions under which the forward exchange rate will be an unbiased predictor of the future spot exchange rate. Answer:  the conditions when forward exchange rate

Operating cycle, discuss the applicability of operating cycle in poultry in...

discuss the applicability of operating cycle in poultry industry

Foreign exchange market, 'Foreign Exchange Market': Definition of 'For...

'Foreign Exchange Market': Definition of 'Foreign Exchange Market' The markets, in which participants are able to sell, buy exchange and speculate on currencies.  Foreign e

Estimation of working capital, Q. Estimation of Working Capital? A firm...

Q. Estimation of Working Capital? A firm must estimate in advance as to how much net working capital will be required for the smooth operations of the business. Only then, it c

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