5.21) Contract costing vle 31 March 2014 HR Construction plc makes up its accounts to 31 March each year. The following details have been extracted in relation to two of its contracts: Contract A Contract B Commencement date Target completion date Retention % 1 April 2013 31 May 2014 4 000 1 December 2013 30 June 2014 3 000 Contract price Materials sent to site Materials returned to stores Plant sent to site Materials transferred Materials on site 31 March 2014 Plant hire charges Labour cost incurred Central overhead cost Direct expenses incurred Value certified Cost of work not certified Cash received from client Estimated cost of completion 2000 700 80 1 000 (40) 75 200 300 75 25 1500 160 1440 135 550 150 30 150 40 15 30 270 18 4 500 20 460 110 Depreciation is charged on plant using the straight line method at the rate of 12 per cent 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 methods are different. (6 marks) (Total 30 marks) CIMA Stage 2