The financial statements of J. Foot Ltd are made up to 31 March in each year. Work on Contract 349 started on 1 July 2006 and completed on 31 January 2008. The total contract price was £580,000, but a penalty of £10,000 was suffered for failure to complete by 31 December 2007.

The following is a summary of receipts and payments relating to the contract:

The amount received from the customer in 2007 represented the contract price of all work certified in that financial year less 20 per cent retention money.
When the financial statements to 31 March 2007 were prepared, it was estimated that the contract would be completed on 31 December 2007, and that the market value of the plant would be £24,000 on that date. It was estimated that further expenditure on the contract would be £198,000.
For the purposes of the financial statements, depreciation of plant is calculated, in the case of uncompleted contracts, by reference to the expected market value of the plant on the date when the contract is expected to be completed, and is allocated between accounting periods by the straight line method.
Credit is taken, in the financial statements, for such a part of the estimated total profit, on each uncompleted contract, as corresponds to the proportion between the contract price 2 the work certified and the total contract price.

Required:

Prepare a summary of the account for this contract, showing the amounts transferred to the profit and loss account at 31 March 2007 and 31 March 2008.

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Year to 31 March 2007 2008 Payments Materials 64,000 82,000 Wages 73,000 109,000 Direct expenses 7,000 11,000 Purchases of plant on 1 July 2006 42,000 Receipts Contract price (less penalty) 156,000 416,000 Sale, on 31 January 2008, of all plant purchased on 1 July 2006 14,000