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Contract costing

Sai Mohan (Mr.) (44 Points)

16 January 2014

What are the treatments for the following transactions in contract costing contract A/c?

1.Donations to local club

2.Land purchased near to the site to open an office

3.Brokerage and commission Paid on the purchase of above land

Also how to calculate wip work uncertified if its not given the question?

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9 Replies

ALEEM AAMIR SALATI (STUDENT CA-IPCC CMA INTER) (33 Points)
Replied 16 January 2014

DONATIONS ARE NOT PART OF CONTRACT A/c.WILL GO TO P/L A/C..

LAND WILL BE SHOWN IN B/S.

COST OF WORK UNCERTIFIED WILL BE CALCULATED AS PER THE INFORMATION OF THE QUESTION

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Sai Mohan (Mr.) (44 Points)
Replied 16 January 2014

If the question is silent about work uncertified, how to calculate?

Sai Mohan (Mr.) (44 Points)
Replied 16 January 2014

Notional profit cannot be calculated without knowing work uncertified.

ALEEM AAMIR SALATI (STUDENT CA-IPCC CMA INTER) (33 Points)
Replied 16 January 2014

THEN YOU HAVE TO FIND % OF MATERIAL,LABOUR AND OVERHEAD PORTION RELATED TO COST OF WIP

ALEEM AAMIR SALATI (STUDENT CA-IPCC CMA INTER) (33 Points)
Replied 16 January 2014

WRITE THE INFO OF QUESTION PROPERLY

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Sai Mohan (Mr.) (44 Points)
Replied 16 January 2014

OK, they have given contact price, work certified and costs till date. While preparing the contact account I debited the relevant expenses and on the credit side work certified and materials closing stock. Can't find the work uncertified. They have also given that 50% of the completed work will be certified and 2/3 rd of the contact price has been completed.

ALEEM AAMIR SALATI (STUDENT CA-IPCC CMA INTER) (33 Points)
Replied 16 January 2014

YOU R SAYING 50% OF THE COMPLETED WORK WILL BE CERTIFIED THATS MEANS THIS PORTION IS UN-CERTIFIED

ALEEM AAMIR SALATI (STUDENT CA-IPCC CMA INTER) (33 Points)
Replied 16 January 2014

DID YOU WRITE 2/3 OF CONTRACT PRICE AS VALUE OF WORK CERTIFIED

Sai Mohan (Mr.) (44 Points)
Replied 17 January 2014

No, the question is the value of work uncertified should not include profit. I wrote 2/3*contact price*50% as work certified. But cannot find the cost portion of the work uncertified.