A company of contractors began to trade on 1st January 1994. During 1994, the company was engaged on only one contract of which the contract price was Rs 5,00,000.

Of the plant and materials charged to contract, plant costing Rs 5,000 and material costing Rs 4,000 were lost in an accident.

On 31st December 1994, plant costing Rs 5,000 was returned to the stores. Cost of work uncertified, but finished Rs 2,000 and materials costing Rs 4,000 were in hand on site.

Charge 10% depreciation on plant and compile contract account and balance sheet form the following:

Rs Rs Share capital 1,20,000 Creditors 10,000 Cash received (80% of work certified) 2,00,000 Land and buildings 43,000 Bank balance 25,000 Rs Rs Charged to contract:
Materials 90,000 Plant 25,000 Wages 1,40,000 Expenses 7,000 3,30,000 3,30,000