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6. Mr. X started contract on 1st January, 2021 and incurred the following expenditure on the contract during the year 2021. Materials Rs. 15,000, Wages
6. Mr. X started contract on 1st January, 2021 and incurred the following expenditure on the contract during the year 2021. Materials Rs. 15,000, Wages Rs. 25,000, Plant Rs. 10,000; overhead charges Rs. 3,000. At the end of the year works to the value of Rs. 1,50,000 has been certified of which 75% had been received in cash; work completed but not certified was estimated Rs. 1,500 and materials valued at Rs. 2,000 were on hand at the site. Of the plant and materials charged to the contract, plant which cost Rs. 2,000 and materials which cost Rs. 1,200 were lost. Plant which cost Rs. 1,000 was returned to stores. After allowing depreciation at the rate of 10% per annum on plant, prepare contract account and point out how much profit is to be taken to Profit & Loss account
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