General information on the Lytax group of companies Lytax Ltd is a company in the building construction
Question:
General information on the Lytax group of companies Lytax Ltd is a company in the building construction industry.
It has three regional offices, North Borders, Midlands and South Downs which are constituted as separate units for accounting purposes.
On 25 May 19X0 Lytax Ltd acquired 90 per cent of the ordinary share capital of Ceprem Ltd, a company which manufactures building materials.
Lytax Ltd has for 3 years held 15 per cent of the ordinary share capital of Bleco plc. This company carries out specialist research and development activities into building and construction materials, technology and techniques. It then sells the results of these activities to other companies.
Details of long-term contract work undertaken by Lytax Ltd At 31 October 19X0, Lytax Ltd was engaged in various contracts including five long-term contracts, details of which are given below:
It is not expected that any contractees will default on their payments.
Up to 31 October 19X9, the following amounts had been included in the turnover and cost of sales figures.
Required:
(a) Calculate the amounts to be included within the turnover and cost of sales figures of the profit and loss account of Lytax Ltd for the year ended 31 October 19X0, in respect of the long-term contracts. ;
(b) Prepare extracts from the balance sheet of Lytax Ltd at 31 October 19X0 incorporating the financial effects of the long-term contracts.
Your answer should comply with the requirements of SSAP 9 (Stocks and Long-Term Contracts)
and should include any supporting notes required by that standard. ;
Workings for individual contracts which build up to the total for each item must be shown.
All calculations should be made to the nearest £1,000.
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