Page 239 - DCOM202_COST_ACCOUNTING_I

Unit 11: Contract Costing

Direct expenses 3,000 Notes
Administrative expenses 1,000

Materials on hand at the end 2,000
Materials returned 1,000
Contract price 2,00,000
Work certified 40,000
Work uncertified 1,600

Cash received from contractee 28,000
Show also work-in-progress in Balance Sheet.
[Important note: Since the amount of cash received from contractee ` 28,000 is more than
the balance of work-in-progress, cash received from contractee will be shown in liability
side of Balance Sheet.]
18. Mahesh Building contractors undertook building construction contract, contract price
being ` 15,00,000. Contract started on 1 April, 2008. Following expenses were incurred
st
during the year:
Direct material purchased ` 2,40,000

Material issued from stores ` 3,30,000
Material received from other contract ` 75,000
Direct wages ` 2,70,000
Indirect expenses ` 75,000
plant and machinery ` 3,00,000

Accrued direct wages ` 15,000
Accrued expenses ` 7,500
Material returned to stores ` 15,000
Material transferred to other contract ` 21,000
Material lost by fire ` 10,500

plant stolen ` 30,000
Materials in hand on 31 March, 2009 ` 12,000
st
st
plant in hand on 31 March, 2009 ` 2,43,000
The contract was completed on 31 March, 2009 but only three-fourth contract price was
st
received upto this date. prepare Contract Account and Contractee Account and also show
the items in Balance Sheet.
19. The following expenses were incurred by a contractor on a contract which he started on
1 April, 2008:
st
plant ` 1,50,000
Materials purchased ` 1,25,000

Direct wages ` 1,50,000
Direct expenses ` 25,000

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