QUESTION 2 HH Construction plc makes up its accounts to 31 March each year. The following details have been extracted in relation to two of its contracts as at 31 March 2005. Contract A Contract B Commencement date 1 April 2004 I December 2004 Target completion date 31 May 2005 30 June 2005 Retention (%) 4 3 K 000 K'000 Contracts price 2,000 550 Materials sent to site 700 150 Materials returned to stores SO 30 Plant sent to site 1.000 150 Materials transferred between contracts (40) 40 Materials on site 31 March 2005 75 5. Plant hire charges 200 30 Labour cost incurred 300 270 Central overhead cost 75 18 Direct expenses incurred 25 4 Value certified 1.500 500 Cost of work not certified 160 20 Cash received from client 1,440 460 * Estimated cost of completion 135 Depreciation is charged on plant using the straight-line method at the rate of 12% per annum. Required: (a) Prepare contract accounts, in columnar format, for each of the contracts A and B. clearly showing the amounts to be transferred to profit and loss in respect of each contract. (16 Marks) (b) Show balance sheet extracts in respect of each contract for fixed assets, debtors and work-in-progress. (9 Marks) 110