Modern Construction Ltd. obtained a contract No. B-37 for the $ 40 lakhs. The following information relate to the contract for the year ended 31st March, 2019: 01/04/2018 31/03/2019 $ •Work-in-progress: •Work certified •Work uncertified • Materials at site •Accrued wages 9,40,000 11,200 30,00,000 32,000 8,000 20,000 3,000 5,000 Additional informations relating to the year 2018-2019 are : •Materials issued from store • Materials directly purchased • Wages paid •Architect's Fees •Plant Hire Charges • Indirect Expenses 4,00,000 Share of General Overheads 1,50,000 for B-37 6,00,000 •Materials Returned to Store 51,000 •Materials Returned to Supplier 50,000 •Fines and Penalties paid 18,000 25,000 15,000 12,000 10,000 The contractee pays 80% pf the worke certified in Cash. You are required to prepare: (i) Contact Account showing clearly the Amount of profits transferred to Profit and loss Account (ii) Contractee's Account. (iii) Balance Sheet.

Modern Construction Ltd. obtained a contract No. B-37 for the $ 40 lakhs. The following information relate to the contract for the year ended 31st March, 2019: 01/04/2018 31/03/2019 $ •Work-in-progress: •Work certified •Work uncertified • Materials at site •Accrued wages 9,40,000 11,200 30,00,000 32,000 8,000 20,000 3,000 5,000 Additional informations relating to the year 2018-2019 are : •Materials issued from store • Materials directly purchased • Wages paid •Architect's Fees •Plant Hire Charges • Indirect Expenses 4,00,000 Share of General Overheads 1,50,000 for B-37 6,00,000 •Materials Returned to Store 51,000 •Materials Returned to Supplier 50,000 •Fines and Penalties paid 18,000 25,000 15,000 12,000 10,000 The contractee pays 80% pf the worke certified in Cash. You are required to prepare: (i) Contact Account showing clearly the Amount of profits transferred to Profit and loss Account (ii) Contractee's Account. (iii) Balance Sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Advise the directors whether or not X Limited should have entered into the contract. Justifyyour answer.
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On 27 January 2021, Johnson Engineering Ltd signed a contract to supply a new machine to Yummy Confectionary Ltd for $92,000 (including GST). This includes $75,000 for the machine (excluding GST), $2,000 for delivering and installing the machine (excluding GST) and $3,000 for servicing the machine in 6 months. Johnson Engineering Ltd delivers and installs the machine on 12 February 2021. An invoice for $92,000 is also given to Yummy Confectionary Ltd on this day. Yummy Confectionary Ltd transfers $92,000 to Johnson Engineering Ltd on 21 February 2021 via internet banking. Johnson Engineering Ltd services the machine on 12 August 2021. Required: Prepare journal entries for invoicing of the contract on 12 February 2021 and the servicing of the machine on 12 August 2021. Johnson Engineering Ltd’s General Journal: Date Account Names Debit Credit 12/2/2021 (To record the invoice for contract with…
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Buildit Corp. was contracted to construct a building for $2,440,000. The contract provided for progress payments. Buildit's accounting year ends 31 December. Work began under the contract on 1 March 20X3, and was completed on 30 November 20X5. Construction activities are summarized below by year: 20x3 20x4 20X5 Construction coats incurred during the year, $610,000; estimated costs to complete, $1,110,000; progress billings during the year, $520,000; and collections, $430,000. Construction costs incurred during the year, $980,000; estimated costs to complete, $350,000; progress billing during the year, $1,690,000; and collections, $1,430,000. Construction costs incurred during the year, $330,000. Because the contract was completed, the remaining balance was billed and later collected in full per the contract. Required: 1. Prepare Buildit's journal entries to record these events. Assume that percentage of completion is measured by the ratio of costs incurred to date divided by total…
Nadeem BSC is a civil engineering company. It started work on to civil engineering projects during the year ended 31 December 2020. The nature of both contracts is that the customer controls the asset as the project goes forward. Work is certified by a surveyor as performance obligations are completed. The following figures relate to those projects at the end of the reporting period. Qadim Bypass Hidd Mall BD’000 BD’000 Contract Price 18,000 16,000 Costs incurred to date 2,800 5,800 Estimated costs to completion 11,200 10,400 Value of work certified to date 5,600 6,000 Progress billing 5,200 6,800 An old disused oil well has been discovered under the site for the Hidd Mall and the costs of dealing with this have been taken into account in the calculation of estimated costs to completion. Nadeem BSC’s lawyers are reasonably confident that the customer will have to bear the additional costs which will be incurred in stabilising…