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N Limited undertook a contract for Rs. 5,00,000 on 1st April 2020. On 31st March 2021 when the accounts were closed, the following details about

N Limited undertook a contract for Rs. 5,00,000 on 1st April 2020. On 31st March 2021 when the accounts were closed, the following details about the contract were gathered:

Materials purchased Wages paid 1, 00,000

General expenses 45,000

Plant purchased 10,000

Materials in hand 31.3.2021 50,000

Wages accrued 31.3.2021 5,000

Work certified 2, 00,000

Cash received 1, 50,000

Work uncertified 15,000

Depreciation of plant 5,000

The contract contained an escalation clause which read as In the event of increase(s) of prices of materials and rates of wages by more than 5% the contract price would be increased accordingly by 25% of the rise of the cost of materials and wages beyond 5% in each case. It was found that since the date of signing the agreement, the prices of materials and wage rates increased by 25%. The value of the work certified does not consider the effect of the above clause.

Prepare the contact account.

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