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

consignment account, A of surat consigns goods to B of jaipur to be sold ...

A of surat consigns goods to B of jaipur to be sold at or above invoice price.B is entitled to get a commission of 8% on sales at invoice price plus 25% of any surplus price reali

What will be the percentage of return on investment, 1. A stock sells for $...

1. A stock sells for $10 a share. you purchase 100 shares for $1000 and after a year, the prices rises to $17.50. What will be the percentage of return on your investment if you bo

What is demands for grants, Q. What is Demands For Grants? The budget p...

Q. What is Demands For Grants? The budget proposals of the expenditures to be met out from the "Consolidated fund of India" should be presented in the form of Demands for Grant

Leases, Company A(lessee) will rent inventory for you for 3 years rather th...

Company A(lessee) will rent inventory for you for 3 years rather than buying it for the regular price of $240,000. Normally these units, which cost us $120,000 to produce, will las

Liquidation of the company, The balance sheet of Marilyn and Monroe was as ...

The balance sheet of Marilyn and Monroe was as follows immediately prior to the partnership's being liquidated: cash, $25,426; other assets, $130,439; liabilities, $22,198; Marilyn

Define the term- how are businesses organised, Define the term- How are bus...

Define the term- How are businesses organised Nearly all businesses which involve more than a few owners and/or employees are set up as limited companies. This means that finan

Consequences of adjudication-adjudication of debtor, Consequences of adjudi...

Consequences of adjudication The consequences of the making of the adjudication order are: 1. The order must be advertised in the gazette and a local paper; 2. The ownershi

Bond''s amortization, On January 1, 2010, Solis Co. issued its 10% bonds in...

On January 1, 2010, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2020. The bonds were issued for $3,405,000 to yield 8%, resulting in

What would be the money multiplier, The SIMPLEX financial system is charact...

The SIMPLEX financial system is characterized by a required reserves ratio of 11 percent; initial excess reserves are $1 million, and there are no currency or other leakages. a.

benefit-cost ratio, The city of Fredericton operates automobile parking fa...

The city of Fredericton operates automobile parking facilities and is evaluating a proposal to erect and operate a structure for parking in the city's downtown area. 2 designs for

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