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As - 7 plz. help me

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Articled assistent
25 Points Posted on 21 September 2012
Contract price is Rs. 5.6 lakhs cost incurred to date is Rs. 5 lakhs work certified is Rs. 4.2 lakhs work uncertified is Rs. 2 thousands further cost to complete 2 lakhs plz. Tell me in p/l account what amount should be debited as construction cost . Whether it is work certified or actual cost incurred. Thanks...!
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On 21 September 2012 at 09:55 Report
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ARTICLESHIP
240 Points Posted on 21 September 2012

as per as 7 in the main P/L ac u directly recognise the profit or loss on the contract and in this case u should recognise a loss of Rs.1.4 lakhs.

 

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On 21 September 2012 at 14:54
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Proprietor
963 Points Posted on 21 September 2012
AS-7 and principal of conservatism says that " you should provide for loss of Rs. 2.00 lacs and thus total cost recognised should be Rs. 5.00 lacs plus Rs. 2.00 lacs i.e, Rs. 7.00 lacs thanks
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On 21 September 2012 at 15:35
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Articled assistent
25 Points Posted on 21 September 2012
Thanks sir.! But i want to know the the exact amount to be recognise as current years revenue based on percentage completion method . Is there no effect of work certified on this ?
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On 21 September 2012 at 21:55


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