a46 Contract Price 299,00,000 Less: Costs to date 249,50,000 Costs to complete 27,00,000 Rectification costs 9,90,000 86,40.000 Estimated contract profit 12,60,000 Cost of Work Certified Profit to date Estimated Profit Estimated Total Cost 3600,000 86,40,000 x1260,000 - 25,25,000 Profit in current period = 25,25,000 - 2,25,000 = 23,00,000. Illustration 8 XYZ contractors obtained a contract to construct a house for 18,00,000. Work was started on 1st January, 2013 and it was estimated that contract would take 15 months to complete. Work is proceeding as per Schedule and the details upto 31st December 2013 are as follows: Materials and stores 1,87.000 Wages Paid 2,70,000 Plant hire charges and other expenses 60,000 Establishment charges 54,000 Material unused 11,000 Work Certified 6,00,000 Cash received 5,40,000 Work not yet certified (at cost) 20,000 It is further estimated that the following further expenses will be required to complete the work: Additional material: 325,000; Wages : 120,000 Sub Contract cost : 550,000; Plant hire charges : 10,000; Establishment Expenses : 311,800; and provision for contingencies : 5% of total cost You are required to calculate the value of Work in Progress as on 31st December 2013 taking credit for a reasonable profit and also show the contract account