Question 3 Bell Equipment Namibia (BEN) is building an extension to a local factory. The agreed contract price is $600 000. The contract commenced on 1 January 2019 and is scheduled for completion on 30 November 2021. BEN’s financial year ends on 31 December. The following details are available concerning the factory contract as at 31 December 2020. Materials sent to site from central stores $25 000 Materials delivered to site direct from suppliers $120 000 Plant delivered to site (net book value) $80 000 Direct wages paid $85 000 Direct site expenses paid $38 00 Head office charges $22 000 Material returned from site to central stores $10 000 Net book value of plant on site, 31 December 2012 $52 000 Materials on site, 31 December 2012 $2 000 Cash received from customer $200 000 Estimated cost to complete the contract $219 000 Required TO: A.) Prepare the contract account for the period ended 31 December 2020 and to show the amount to be included in BEN’s income statement in respect of the contract for that period.
Question 3
Bell Equipment Namibia (BEN) is building an extension to a local factory. The agreed contract price is $600 000. The contract commenced on 1 January 2019 and is scheduled for completion on 30 November 2021. BEN’s financial year ends on 31 December.
The following details are available concerning the factory contract as at 31 December 2020.
|
Materials sent to site from central stores |
|
$25 000 |
|
Materials delivered to site direct from suppliers |
|
$120 000 |
|
Plant delivered to site (net book value) |
|
$80 000 |
|
Direct wages paid |
|
$85 000 |
|
Direct site expenses paid |
|
$38 00 |
|
Head office charges |
|
$22 000 |
|
Material returned from site to central stores |
|
$10 000 |
|
Net book value of plant on site, 31 December 2012 |
|
$52 000 |
|
Materials on site, 31 December 2012 |
|
$2 000 |
|
Cash received from customer |
|
$200 000 |
|
Estimated cost to complete the contract |
|
$219 000 |
Required TO:
A.) Prepare the contract account for the period ended 31 December 2020 and to show the amount to be included in BEN’s income statement in respect of the contract for that period.
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