Stone By Stone Ltd ('SBS') is a construction company involved in several building contracts. Details of two of the contracts in progress at the company's year end of 31 December 2012 are as follows.

\section*{Patterson Palace}

This contract was originally negotiated in March 2010 at a price of \(£ 10.5 \mathrm{~m}\). In a bid to ensure speedy completion, an additional \(5 \%\) incentive payment was included in the contract for completion by 31 March 2012.

During 2011, Lady Patterson amended the specification and both parties agreed that an increase of \(£ 0.5 \mathrm{~m}\) should be made to the contract price. The incentive payment was also to apply to this variation.

At 31 December 2012, the contract is \(95 \%\) complete and the engineers are confident it will be completed by mid-March 2013.

\section*{McLeod Mansion}

This contract to construct a futuristic building was secured in January 2011 after a long period of tender and negotiation. SBS has estimated the total costs of the contract to be:

The development costs of \(£ .260,000\) relate to the estimated costs of finalizing a new technique to be used to construct the building. As this technique is likely to be used on future contracts, SBS did not specify reimbursement of these in the terms of the contract.
It is company policy to provide \(5 \%\) of total costs for rectification and guarantee work.
Of the \(£ 620,000\) contract tender costs, \(£ 512,000\) were incurred and written off to the statement of comprehensive income in the year to 31 December 2011.
\section*{Required}
Calculate the total revenue for the Patterson Palace contract and the estimated total costs of the McLeod Mansion contract.

Transcribed Image Text:

000 Materials 9,650 Labour 4,200 Subcontracted work 1,560 Professional fees 710