Balance Sheet of Contractor

Placement of important items in the balance sheet of contractors

Example:

The following particulars are obtained from the books of Vinak Construction Ltd. as on March 1983:

 

Plant and Equipment at cost                           Rs. 4,90,000

Vehicles at cost                                              Rs. 2,00,000

 

Details of contract which remain uncompleted as on 31.03.1983:– 

 Contract Nos. 

 

Contract Nos

Contract Nos

Contract Nos

 

V.20

V.24

V.25

 

(Rs. Lacs)

(Rs. Lacs)

(Rs. Lacs)

Estimated final sales value

7.00

5.60

16.00

Estimated final cost

6.40

7.70

12.00

Wages

2.40

2.00

1.20

Materials

1.00

1.10

0.44

Overheads(excluding depreciation)

1.44

1.46

0.58

Total costs to date

7.20

4.20

2.40

Process payments received

5.00

3.20

2.00

 

 Depreciation of Plant and Equipment and Vehicle should be charged at 20% to the three contracts in proportion to work certified.

You are required to prepare statements to show contract wise and total:

(i) Profit/loss to be taken to the P&L A/c for the year ended 31st March 1983;

(ii) Work-in-progress as would appear in the Balance Sheet as at 31st March 1983.

      

Solution

 

Vinak Construction Co. Ltd.

Statement of Profit / Loss to be taken to Profit & Loss Account

(for the year ended 31st March, 1983)

 

  Contract nos Contract nos Contract nos Contract nos
  V.20 V.24 V.25 Total
  (Rs.Lacs) (Rs.Lacs) (Rs.Lacs) (Rs.Lacs)
  1. A.     Percentage o completion
       
Estimated sales value 8.00 5.60 16.00 —-
Work certified 7.20 4.20 2.44 —-
Percentage of completion 90 75 15 —-
(See Note 1)        
  1. B.     Estimated result on completion
       
Estimated sales value 8.00 5.60 16.00 —-
Estimated costs 6.40 7.00 12.00 —-
Estimated profit (loss) 1.60 (1.40) 4.00 —-
  1. C.     Result to date
       
Work certified 7.20 4.20 2.10 13.80
Cost to date(excluding deprecation) 4.84 4.56 2.22 11.62
Depreciation (See note 2) 0.72 0.42 0.24 1.38
 Total cost 5.56 4.98 2.46 13.80
National profit (loss) 1.64 (0.78) (0.06) 0.80
Profit (loss) to be taken to profit & loss account  (See note 3) 1.00 1.40 0.06 0.46
Reserve for contingencies (See note 4) 0.64 0.62 —- 1.26

 

Vinak Construction Co. Ltd.

Statement of Work-in-Progress as would appear in

Balance Sheet on 31 March, 1983

 

  Contract nos Contract nos Contract nos Contract nos
  V. 20 V. 24 V. 25 Total
  (Rs.Lacs) (Rs.Lacs) (Rs.Lacs) (Rs.Lacs)
Work Certified 7.20 4.20 20.40 13.80
Less Reserve for contingencies 0.64 0.62 —- 1.26
Less: Payment received 5.00 3.20 2.00 10.20
Work in progress 1.56 0.38 0.40 2.34

 

Working Note

Contract costing working notes 2nd year bcca

 

contract costing working notes2 2nd year bcca

 

 

 

 

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