Particulars Rs. Rs.

Particulars

To Materials 900000

To labour 850,000 By
To Depri 20,000
To Direct Expenses 35,000
To indirect Direct Expenses 15000

To Notional loss (?) -70,000

1,750,000
By

To P/l (Balancing figure) -70,000

Working Notes

1 Work Certified Ratio

2 Depriciation
WC Ratio = WC x 100
CP

1750000 x 100
7,500,000

= 23.33333333

Particulars Rs. Rs. Particulars

To Work in progress :
Work Certified 1,750,000
Less Reserve -
1,750,000
To Materials 1,100,000
To Dep 30000 By
To labour 1,150,000
To Direct Expenses 125,000
To indirect Direct Expenses 20000

To Notional Profit (?) 1,575,000

5,750,000
 To Costing P/L By
(1575000 x 2/3 x 5085000/5650000) 945,000

To Reserve (Balancing figure) 630,000 630,000

1,575,000

Working Notes

1 Work Certified Ratio

2 Depriciation
WC Ratio = WC x 100
CP

5650000 x 100
7,500,000
3 cash received
= 75.33 %

Particulars Rs. Rs. Particulars

To Work in progress :
Work Certified 5,650,000
Work uncertified 100000
Less Reserve 630,000
5,120,000
To Materials 630,000
To Dep 30000 By
To labour 850,000
To Direct Expenses 45,000
To indirect Direct Expenses 0 1,555,000

To Net profit 825,000

7,500,000
 Rs. Rs.

Work in progress :
Work Certified 1,750,000
Work Uncertified

1,750,000
Notional losss -70,000

-70,000

plant issued 100,000

value at the end 80,000
dep 20,000

Rs. Rs.

Work in progress :
Work Certified 5,650,000
Work Uncertified 100,000 5,750,000

5,750,000
 Notional Profit 1,575,000

1,575,000

value of plant 80,000

value at the end 50,000
dep 30,000

sh received
90% of work certified 5,085,000

Rs. Rs.

Contractee account 7,500,000

- 7,500,000

7,500,000
 Particulars Rs. Rs. Particulars

To Materials Purchased 225,000

To Direct Wages 60,000 By
Add : Outstanding 15,000 75,000 By
To General Expenses 8,000
To Dep on plant 5,000
To Notional Profit (?) 36,000 By
349,000
To Costing P & L Account By
(36000*1/3*195000/320000) 7,313
To Reserve (Balancing figure) 28,688

36,000

Working Notes

1 Calculation of Escalation Clause

Net material cost 225000

Total Labour Cost 75000
300,000 after increase = 300000
before increase = 300000*100/12
Total Price Rise in 2018
(300000 x 25) 60000
125

Less : Allowable 10% price rise

(240000*10%) 24000
Net Price Rise 36,000

Escalation Clause (25% of net price rise) 9,000

2 Work Certified Ratio

WC Ratio = WC x 100
CP

= 320000*100
700,000

= 46 %
Therefore 1/3 ratio will be used
Particulars Rs. Rs.

Work in progress :
Work Certified 320,000
Work Uncertified 20,000 340,000

Escalation Clause (WN 1) 9,000

349,000
Notional Profit 36,000

36,000

after increase = 300000

before increase = 300000*100/125 240,000
 Particulars Rs. Rs. Particulars

To Materials Purchased 15,000,000 By

Less : Materials on hand on 31-03-2014 45,000
Less : return to Stores 60,000
Less : Materials lost in accident 15,000 14,880,000
To Direct Wages 4,320,000
To Indirect Labour wage 324,000
To Dep on plant (WN 1) 330,000
To Supervisor charges 176000
To Indirect material 1,300,000
To Administrative Overhead 264,000
To Subcontract charges 195,000
To Architect fees 560,000

To Notional Profit (?) 6,060,000

28,409,000
To Costing P & L Account 3,636,000 By
(6060000*2/3*25200000/28000000)
To
Reserve (Balancing figure) 2,424,000

6,060,000 -
Working Notes

1 Dep on Plant
Cost 3000000
cash received
Dep rate 12%

No of months 11

2 Calculation of Work certified

Cash received 25,200,000 = 90% of x

work certified 28,000,000

 WC Ratio = WC x 100
CP

= 280000000*100
40,000,000

= 70 %

Therefore 2/3 ratio will be used

Particulars Rs. Rs.

Work in Progress :
Work Certified 28,000,000
Work Uncertified 409,000

28,409,000
Notional Profit 6,060,000

6,060,000

25,200,000

work certified 28,000,000

work uncertified 409,000

X being work certified

 2017

Particulars Rs. Rs. Particulars

To Work in progress :
Work Certified 1,350,000
work uncertified 15,000 1,365,000

To Materials 1,000,000 By
1,000,000
To Dep 56,250 By
To labour 900,000
To Direct transportation 90,000
To material at site on 2016 75000
To indirect Direct Expenses 75000
3,561,250
To Notional Profit (?) 1,038,750

To Costing P/L 519,375 By

1113750*2/3*3375000/4500000
To Reserve (Balancing figure) 519,375

1,038,750

WC Ratio = WC x 100
CP therefore 2/3 2016
will be taken
4500000 x 100 =
6,000,000 75 %
2017

cash received (2017) 3,375,000

2018

Particulars Rs. Rs. Particulars

To Work in progress : By
Work Certified 4,500,000
work uncertified 75000
less reserve 519,375 4,055,625 By
To Materials 1,000,000
1,000,000
To Dep 42,188
To labour 725,000
To Direct transportation 75,000
To indirect Direct Expenses 24000
5,946,813

To Net profit 153,188

2018
 Rs. Rs.

closing stock of material 25000

Work in progress :
Work Certified 4,500,000
Work Uncertified 75,000 4,575,000

4,600,000
Notional Profit 1,038,750

1,038,750

plant issued 300,000

Dep rate 0.25
dep 75,000

plant value 225,000

rate 0.25
dep 56,250

Rs. Rs.

closing stock 100,000

Contractee account 6000000 -

(contract price)

6,100,000

plant value 168,750

rate 0.25
dep 42,188
 Particulars Rs. Rs. Particulars

To Materials Purchased 300000 By

To Direct Wages 135,000 By
Add : Outstanding 15,000 150,000 By
To General Expenses 27,000
To Dep on plant 18,000
To Notional Profit (?) 243,750 By

To Costing P & L Account By

242400*1/3*450000/1500000 60,938

To Reserve (Balancing figure) 182,813

Working Notes

1 Calculation of Escalation Clause

Net material cost 225000

Total Labour Cost 150000
375,000

Total Price Rise in 2018

(375000 x 25) 75000
125

Escalation Clause (25% of net price rise) 18,750

2 Work Certified Ratio

WC Ratio = WC x 100
CP

= 600000*100
 1,500,000

= 40 %

Therefore 1/3 ratio will be used

 Rs. Rs.

Materials in hand 75,000

Work in progress :
Work Certified 600,000
Work Uncertified 45,000

Escalation Clause (WN 1) 18,750

738,750
Notional Profit 243,750

243,750

cash received 450,000

after increase = 300000 435000

before increase = 375000*100/125 300,000
 Particulars House 1 (Rs.) House 2 (Rs.)

To Work in progress 14800 0 By

To Materials purchased 23,000 16,600 By
To Wages 20,000 14,000 By
To electrical fittings and services 1400 300
To road making charge 8000
To depriciation 1000 400 By
To establishment expense 7200
5,040 By
75400 36,340

To Notional profit 2,698

To Costing P & L Account 1,199 By

To Reserve 1,499

2,698

WN1

24000 66 2/3 of x
x being work certified
35998.20009

WN2 20:14
house 1 house 2
12240 7200 5040

WN3
depriciation

value used on site 12000 6000

rate 10% 10%
time left 10 months 8 months

depriciation 1000 400

Particulars House 1 (Rs.) House 2 (Rs.)

Work in progress
Work certified 60,000 35,998
Work uncertified 0 2,500

Materials in hand 400 540

Net loss 15,000

75,400

39,038

Notional profit 2,698

2,698
0

WN4

WC Ratio = WC x 100
CP

= 35998.2001*100
40,000

= 89.996
 Particulars Rs. Rs. Particulars

To Materials Purchased 50000 By

Less : damaged materials 4,000 46,000 By
By
To Direct Wages 300,000 300,000
To Dep on plant 5000

To Notional Profit (?) 60,000

By
To Costing P & L Account 18,000
(60000*1/3*360000/400000)
To Reserve (Balancing figure) 42,000

60,000
Working Notes

Depriciation 5000

Wc ratio

WC x 100
CP

400000 x 100 = 40 %
1000000

therefore 1/3
Particulars Rs. Rs.

Materials Realised 1,000

Work in progress :
Work Certified 400,000
Work Uncertified 10,000 410,000

411,000
Notional Profit 60,000

60,000

work certified

360000 x 100/90 = 400000

18000
 Particulars Rs. Rs. Particulars
By Materials lost
To Materials Purchased 50000 By Materials in hand
To Direct Wages 71,000 By Work in progress :
To Other Expenses 10000 By Work Certified
To Dep on plant 2400 133,400 Work Uncertified

To Notional Profit (?) 53,600

To Costing P & L Account 14,293 By Notional Profit

To Reserve (Balancing figure) 39,307

Working Notes

13000
45
Rs. Rs.
3,000
2,500

180,000
1,500 187,000

1950