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

Modern approach, Meaning merits nd demerits of modern approch of financial ...

Meaning merits nd demerits of modern approch of financial management

Estimate incremental cash flows, You just recently joined Manawatu Blinds a...

You just recently joined Manawatu Blinds and Curtains (MBC) group, a partnership firm based in Manawatu region providing windows, dressings, and installations to both commercial an

Suggestion regarding Credit limit. Should it be approved or, Suggestion reg...

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Issuance of securities, Issuance of securities  : Security issues by co...

Issuance of securities  : Security issues by companies are a novel and common way of raising funds that in turn help realize their growth aspirations. It is therefore necessary

Margin trading, Margin Trading: Suppose an investor wants to buy 100 Re...

Margin Trading: Suppose an investor wants to buy 100 Reliance Energy shares, whose market price is Rs.500. This transaction requires Rs.50,000 but the investor has only Rs.30,0

Explain some examples under fasb 52, Explain some Examples under FASB 52 th...

Explain some Examples under FASB 52 that a foreign entity's functional currency would be similar as the parent firm's currency. Answer:  Three instances under FASB 52, in which

Charge for depreciation and amortization, Talbot Enterprises recently repor...

Talbot Enterprises recently reported an EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was i

What is profit maximisation criterion, Profit maximisation criterion P...

Profit maximisation criterion Profit maximisation criterion is unsuitable and inappropriate as an operational objective of financing, investment and dividend decisions of a fi

Define the term- franchise, Franchise (licensing) - Granting or licensi...

Franchise (licensing) - Granting or licensing of the right to use systems, expertise,brandsknow how etc. to another  organisation,  generally in  return  for  a  profit  share

Caselets, How would you judge the potential profit of Bajaj Electronics on ...

How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit.

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