Builders Ltd commenced work on 1 July 20X0 on a contract the agreed price of which was £250,000. Expenditure incurred during the year to 30 June 20X1 was as follows:

Wages £60,000; plant £17,500; materials £42,500; sundry expenses £4,000; and head office charges allocated to the contract amounted to £5,500. Part of the plant which had cost £1,300 was sold for £1,500.

Of the contract price £100,000 representing 80 per cent of the work certified had been received by 30 June 20X1 and on that date the value of the plant on the site was deemed to be £4,500 and that of the unused materials £1,250. Work costing £12,500 had been completed but not certified at 30 June 20X1.

It was decided to estimate what further expenditure would be incurred in completing the contract for the purpose of computing the estimated total profit that would be made on the contract and to take to the credit of the profit and loss account for the year a proper proportion thereof.

The estimate of additional expenditure that would be required, based on the assumption that the contract would be finished in six months’ time, was as follows:

(a) Wages to complete £52,800.

(b) Materials in addition to those in stock on 30 June 20X1 would cost £35,000.

(c) Sundry expenses would amount to £1,800.

(d) Plant in addition to plant in hand at 30 June 20X1 would cost £6,500 and the residual value of plant at 31 December 20X1 would be £3,750.

(e) Contingencies would require a further £3,500.
Prepare a contract account at 30 June 20X1.