Page 222 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes Contract Ledger

Contract No. : ....................... Contract price : .......................
Date of Completion : ....................... Terms of payment : ......................
Site : ....................... Work Certified : .......................
Remark : ....................... Date : ......................
Date particulars Materials (`) Wages (`) Direct plant (`) Indirect Total
Charges (`) Expenses (`) (`)

Total

Did u know? In contract ledger, a separate contract account is prepared for each individual
contract, so that for a specific contract all cost can be accumulated at one particular place.
All the expenses likely to be incurred on contract, such as direct materials, direct labour, direct
expenses, indirect expenses, cost of specific plant, outstanding expenses, sub-contract cost and
the depreciation of the common plant being used at the same time on other contract etc., are
debited.
In the credit side of the contract account, the cost of raw material returned to supplier, to store,
transferred to other contracts, material sold, material damaged, material in hand, material stolen,
plant returned to store, plant sold, plant transferred to other contracts, plant at site are shown.
The material and plant which are stolen are treated as abnormal loss and hence, transferred to
profit and loss account.
In addition to above items, if the contract is completed then contract account is credited by the
contract price. If at the end of the financial year the contract remains in complete then contract
account is credited by cost of work-in-progress amount. In this work-in-progress, the cost of
certified work and uncertified work are included. At the end, the profit or loss on contract is
determined as per rules stated ahead in respect to contract account.
The Kartik Housing Construction Limited
Contract No. : .............................. Date Started : .............................
Terms of Contract : .............................. Date Completed : .............................
Contract Price : .............................. Place of Work : .............................
Terms of payment : .............................. Escalation Clause, if any : .............................
Dr. Contract Account No. ................. Cr.
particulars Amount (`) particulars Amount (`)
To Materials : By Materials :
Direct material purchased .... Returned to suppliers ....
Issued from stores .... Returned to stores ....
Transferred from other .... .... Transferred to other ....
contract contract

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