The following information relates to Contract 6502, which was undertaken for the construction of roadways for the City Council. The total value of the contract was $250,000 and it is at a stage where profits can be attributed to it. Details of the contract are shown in the books: $ Materials sent to site 85,349 Labour engaged on site 74,375 Plant installed at cost 15,000 Direct expenditure 4,136 General overhead charges 3,167 Materials returned to store 549 Work certified 195,000 Cost of work not certified 4,500 Materials on hand, December 31 1,883 Wages accrued on December 31 2,400 Direct expenditure accrued on Dec 31 240 Value of plant December 31 11,000 Cash received on account amount 180,000 Required: Prepare the Contract Account as at December 31, 2019. Prepare the Contract P&L account for the year ended December 31, 2019. Prepare the Contractee Account as at December 31, 2019. Explain the term ‘retention money.’
The following information relates to Contract 6502, which was undertaken for the construction of roadways for the City Council.
The total value of the contract was $250,000 and it is at a stage where profits can be attributed to it. Details of the contract are shown in the books:
$
Materials sent to site 85,349
Labour engaged on site 74,375
Plant installed at cost 15,000
Direct expenditure 4,136
General
Materials returned to store 549
Work certified 195,000
Cost of work not certified 4,500
Materials on hand, December 31 1,883
Wages accrued on December 31 2,400
Direct expenditure accrued on Dec 31 240
Value of plant December 31 11,000
Cash received on account amount 180,000
Required:
- Prepare the Contract Account as at December 31, 2019.
- Prepare the Contract P&L account for the year ended December 31, 2019.
- Prepare the Contractee Account as at December 31, 2019.
- Explain the term ‘retention money.’
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