(Ascertainment of work uncertified) M/s Kishore & Company commenced the work on a particular contract on 1st April 1997. They close their books of accounts for the year on 31st December each year. The following information is available from their costing records on 31st December 1997:
|
Rs |
|
|
Material sent to site |
50,000 |
|
Wages paid |
1,00,000 |
|
Foreman’s salary |
12,000 |
A machine costing Rs 32,000 remained in use on site for 1/5th of the year. Its working life was estimated at 5 years and scrap value at Rs 2,000. A supervisor is paid Rs 2,000 per month and had devoted one-half of his time on the contract.
All other expenses were Rs 15,000. The material on site was Rs 9,000. The contract price was Rs 4,00,000. On 31st December, 1997, 2/3 of the contract was completed; however, the architect gave certificate only for Rs 2,00,000 on which 75% was paid. Prepare the Contract Account.
