The contract ledger of a company showed the following expenditure on account of a contract on 31st December Rs Materials 60,000 Plant 10,000 Wages 82,200 Establishment charges 4,300 1,56,500 The contract was commenced on 1st January and the contract price was Rs 3,00,000; cash received on account to date was Rs 1,20,000 representing 80% of the work certified the remaining 20% being retained until completion. The value of materials on hand was Rs 2,000 and the cost of work finished but not certified as at 31st December was Rs 3,000.
Prepare an account in respect of the contract, showing the price to date, assuming depreciation on plant at 10 per cent annum and state the proportion of profit the company would be justified in taking to the credit of profit and loss account.