Assets Amount Work in Progress: Value of work certified Cost of work uncertified Less: Reserve for unrealised profit Less: Amount received from the contractee If the expenditure on incompleted contracts includes the value of plant and materials, these items may be shown separately in the balance sheet. Thus, instead of showing the total expenditure under the heading of work-in-progress, expenditure may split up and shown separately in the balance sheet, under the headings of plant at site, material at site, and work-in-progress. REVIEW QUESTIONS Re-write the following sentence after filling-in the blank spaces with appropriate word: Contracts are undertaken to requirements of the customers. (1) costing is applied for Engineering Projects. (iii) In case of contracts, only portion of the protit is taken to the Profit and Loss account depending on the extent of work completed on the contract Correct answer: (1) Special (1) Contract (1) Incomplete 115 Illustration 6 The following balances were extracted from the books of a building contract on 31st March, 2014 regarding Contract No. 123: Materials issued to site 6,27,200 Wages Paid 7,34,550 Wages outstanding on 31.3.2014 7,200 Plant issued to site 60,000 Direct charges paid 25,150 Direct charges outstanding on 31.3.2014 2,100 Establishment charges 56,500 Stock of materials at site on 31.3.2014 12,000 Value of work certified on 31.3.2014 16,50,000 Cost of work not yet certified 35,000 Cash received on account of architect's certificate after deduction by customer of 5 percent retention money 14,10,750 The work was commenced on April 1, 2013 and the contract price agreed at 24,50,000. Prepare contract account for the year providing for depreciation of plant of 25 per cent. Calculate the Profit or Loss in the contract to date and make such provision in the contract account as you consider desirable. Set out also contractor's balance sheet so far as it relates to the contract