Question

Amar Builders undertook a contract for Rs. 10,00,000. The following expenses were incurred for this contract during the year 2016 -17: 

Particulars	(Rs.)
Material sent to site	3,10,000
Direct wages paid	2,80,000
Chargeable Expenses	60,000
Plant Installed	1,00,000
General Expenses	90,000
Establishment Charges	70,000

The architect of contractee certified work of 6,00,000 at the end of year. The cost of work uncertified was Rs. 50,000 on that date. The material and plant were at site of 30,000 and Rs. 60,000 respectively at the end of the year.
You are required to prepare Contract Account and show how these transactions will appear in the Balance Sheet of the contractor at the end ofthe year.

Answer 1

Books of Amar Builder

Dr.

Contract Alc

Cr.

Particulars	(Rs.)	Particulars	(Rs.)
To Material -Sent to Site	3,10,000	By Work Certified	6,00,000
To Direct Wages Paid	2,80,000	By Work Uncertified	50,000
To Chargeable Expenses	60,000	By Material at Site	30,000
To Plant Installed	1,00,000	By Plant at Site	60,000
To General Expenses	90,000	By Notional Loss c/d	1,70,000
To Establishment Charges	70,000
	9,10,000		9,10,000

Extracts of Balance Sheet (For the Year Ended 31-12-2017)

Liabilities	(Rs.)	Assets		(Rs.)
		Material at Site		30,000
		Plant at Site		60,000
		Work-in-Progress:
		Work Certified	6,00,000
		(+) Work Uncertified	50,000
			6,50,000
		(-) Cash Received	-
			6,50,000
		(-) Stock Reserve	-	6,50,000