Intermediate: Contract costing HR Construction pic makes up its accounts to 31 March each year. The following details have been extracted in relation to two of its contracts:

Depreciation is charged on plant using the straight line method at the rate of 12% per annum.
Required:

(a) Prepare contract accounts, in columnar format, for EACH of the contracts A and B, showing clearly the amounts to be transferred to profit and loss in respect of each contract.
(20 marks)

(b) Show balance sheet extracts in respect of EACH contract for fixed assets, debtors and work in progress. (4 marks)

(c) Distinguish between job, batch and contract costing.
Explain clearly the reasons why these meth¬ ods are different.

Transcribed Image Text:

Commencement date Target completion date Retention% Contract A Contract B 1 April 1999 1 December 1999 31 May 2000 30 June 2000 4 3 000 000 Contract price 2,000 550 Materials sent to site 700 150 Materials returned to stores 80 30 Plant sent to site 1,000 150 Materials transferred Materials on site 31 March 2000 (40) 40 75 15 Plant hire charges 200 30 Labour cost incurred 300 270 Central overhead cost 75 18 Direct expenses incurred 25 4 Value certified Cost of work not certified Cash received from client Estimated cost 1,500 500 160 20 1,440 460 of completion 135 110