Chaudhary Construction Company (Pvt.) Ltd signed a three years contract on 1st January 2010 with a

Government Department for the construction of four stories office building. The cost, billing and other

information is as under:

2010 2011 2012 Total

Rs in thousands Rs in thousands Rs in thousands Rs in thousands

Construction Cost 52,000 48,000 70,000 170,000

Billings 45,000 55,000 90,000 190,000

Cash Collection 40,000 58,000 92,000 190,000

Chaudhary Construction Company (Pvt.) Ltd uses Completed Contract Method for recognizing gross

profit.

Required:

i. Journal entries to record the above transaction using completed contract method. Also draw partial

balance sheet of Faisal Construction Co. to show the balances of construction cost and billing. (5)

ii. Journal entries to record transactions in the employers books. (3)

iii. Draw up the construction in progress account and Billing Contract account and also show the final

journal entry to close the accounts in 2012.