Contract Costing
Contract Costing
1. M/s Contractors and Engineers undertook a contract for construction of a building for Rs. 25,00,000.
Following information of the contract for the year ended 31/3/2016. Amount in Rs.
Materials 8.53.490
Labour engaged on site 7,43,750
Plant installed at site 1,50,000
Direct Expenses 31,670
Establishment charges 41,260
Material return to stores 5,490
Work certified 19.50,000
Cost of work not yet certified 45,000
Value of plant on 3/3/206 1,10,000
Materials at site 31/3/2016 18,830
Wages accrued on 31/3/2016 24,000
Direct expenses accrued on 3/3/2016 2,400
Prepare contract account, contractees account work in progress account. Show the WIP will appear in
Balance sheet of M/s Contractors and engineers as at 31/3/2016
2. Shankar Construction ltd has undertaken construction of ridge the cost price Rs. 65 lakhs.Other details
are as follows
Rs.
Materials bought 16,50,000
Materials sent from stores 4,00,000
Laour cost 20,00,000
Direct expenses 1,25,000
Hire and use of plant 60,000
General overheads allocated 1,75,000
Materials on hand at the end of the period 31,500
Wages accrued at the end of the period 37,500
Direct expenses accrued at the end of the period 7,500
Cost of work certified y the architect 55,00,000
Cost of work uncertified 1,00,000
Cash received from contractee 44,00,000
Prepare contract account, contractee a/c, work in progress a/c, show how the work in progress will appear
in balance sheet.
3. The following expenses were incurred on a contract which commenced on 1/4/2015.
Rs.
Material Purchased - Rs. 2,20,000
Materials at the end Rs. 5,000
Direct wages Rs. 45,000
Plant issued Rs. 20,000
Direct expenses Rs. 15,000
The contract price was Rs.3,30,000. It was duly received when the contract was completed on 31/3/2016.
Charge indirect expenses at 15% on wages and provide 15% for depreciation on plant p.a. Prepare
Contract a/c, contractee’s a/c in the books of contractor.
4. Construction ltd is engaged on 2 contracts A and B during the year The following particulars are
obtained at the year ended 31/3/2016
Particulars A B
Date of Commencement 1/4/2015 1/9/2015
Contract Price 6,00,000 5,00,000
Materials Issued 1,60,000 60,000
Materials returned 4,000 2,000
Materials on site on 31/3/2016 22,000 8,000
Direct Labour 1,50,000 42,000
Direct Expenses 66,000 35,000
Establishment Expenses 25,000 7,000
Plant installed at cost 80,000 70,000
Value of plant on 31/3/2016 65,000 64,000
Cost of contract not certified 23,000 10,000
Value of contract certified 4,20,000 1,35,000
Cash received from contractor 3,78,000 1,25,000
Architect fees 2,000 1,000
During the year material amounting to Rs.9,000 have been transferred from Contract A to Contract B.
Prepare contract account, contractee account
5. Following information relate to 2 contracts of Maruthi construction ltd for the year ended 31/3/2016
Particulars A B
Material sent to site 170, 698 146,534
Labour 1,48,750 1,37,046
Plant installed 30,000 25,000
Direct expenses 6334 5,718
Establishment expenses 8252 7,704
Materials returned to stores 1098 1,264
Work Certified 3,90,000 2,90,000
Work uncertified 9,000 6,000
Materials on site on 31/3/2016 3,766 3,472
Wages accrued on 31/3/2016 4,800 4,200
Direct expenses accrued on 31/3/2016 480 360
Value of plant on 31/3/2016 22,000 19,000
Contract price 5,00,000 4,00,000
Assume cash received being 80%of work certified. Prepare contract a/c, contractee’s a/c
6. PQR Ltd was engaged on one contract during the year 205-6. Contract price was Rs. 2,00,000. The trial
balance extracted from the books 31/3/206 was as follows:
Particulars Dr Cr
Share Capital 40,000
Sundry Creditors 4,000
Building 17,000
Cash at bank 4,500
Contract a/c
Materials 37,500
Plant 10,000
Wages 52,500
Cash received from contractee (80% of work certified) 80,000
Expenses 2,5001
Total 1,24,000 1,24,000
Of the plant and material charged to the contract, plant costing Rs.1,500 and material costing Rs.,200
were destroyed in an accident. On 31/3/206 plant costing Rs.2,000 was returned to stores and material at
site valued at Rs.1,500. Cost of work uncertified was Rs.1,000. Charge depreciation 10% pa on plant.
7. The following information relates to Contract No.58 Prepare contract account and Contractee’s account
assuming the amount was duly received
Rs
8. The following information relate to building contract for Rs.10,00,000 for which 80% of value of work
in progress as certified y the architect is being paid y the contractee.
9. Following particulars were related to contract no. 60 for the year ending 31/3/2016
Particulars Amount
Materials 2,40,000
Wages 2,28,000
Plant and Machinery 50,000
Overheads 18,000
Establishment expenses 12,500
Direct Expenses 22,000
Cash received on account pf contract up to 3/3/20116 was Rs.4,00,000 being 80% of the work certified.
The value of materials in hand was Rs. 25,000. The plant & machinery is depreciated at 15% p.a. The
contract price is Rs. 12,00,000