Sandeep Wawhal (Chartered Accountant PGDFM BCom.) (1782 Points)
02 December 2011friends,
pls explain how work certified and notional profit is calculated in the attached question.
Urgent
ashish gupta
( student)
(1922 Points)
Replied 02 December 2011
Everything is clear in the solution. Contract price is 20L and 50 % has been certified so work certified is 10L
CA PRABHAKAR JHA
(ACA)
(313 Points)
Replied 02 December 2011
| Originally posted by : SANDEEP R. WAWHAL | ||
 |
friends, pls explain how work certified and notional profit is calculated in the attached question. Urgent |
 |
Dear SANDEEP,
Work Certified is already given in the question as certified by architect i.e, 50% of contract price of Rs.20 Lakhs
Work Uncertified is calculated on cost basis, As given in the question that 2/3 of contract was completed and 1/2 half was certifed by the architect, means 2/3-1/2 = 1/6 remains uncertified.
Work Cost for 2/3 of contract is 10,49,000, therefore value of uncertified work will be
1049000 X 3/2 X 1/6 = 2,62,250
Notional profit is balancing figure or may be calculated like this
Work Certified- (Work Cost- Work Uncertified)= Notional Profit
10,00,000-(10,49,000-2,62,500) = 2,13,250
Hope this will clear you doubt,
Sandeep Wawhal
(Chartered Accountant PGDFM BCom.)
(1782 Points)
Replied 02 December 2011
Thanks prabhakar for detailed explainaiton......
madinashabana11
(MBA)
(1102 Points)
Replied 02 December 2011
Agree with friend Prabhakar............
prajith
(Student)
(24 Points)
Replied 21 October 2012
Mistake sir.....
Contract revenue should be 20lac * 66.67% =1333400
Profit (1333400-1049000)=284400
snata mohapatra
(cs)
(21 Points)
Replied 11 December 2013
yamini mallireddy
(student)
(23 Points)
Replied 10 August 2014
In contract costing,which price is considered for degree of completion whether the contract price or the contractee accepted price?
SC Charuhas
(student)
(35 Points)
Replied 06 September 2016
As the cost to date is 1049000, and here it given that 2/3 of contract is completed it means, cost of full contract will be 1049000*3/2=1573500. And it's given 50% of contract is completed than it means cost of work certified will be 50% of 1573500 i,.e 786750. So notional profit= work certified - cost of work certified i.e, 1000000-786750=213250 Work uncertified(valued at cost)= cost to date(works cost)- cost of work uncertified i,e. 1049000-786750=262250...
CA Ajay Thakkar
(Others)
(148 Points)
Replied 19 September 2016
AT CONTRACT PRICE AT COST
CONTRACT COMPLETED UP TO DATE 13,33,333 (2/3 X 2000000) 10,49,000
WORK CERTIFIED UP TO DATE 10,00,000 (1/2 X 20,00,000) ? (786750)
(1049000 X 1000000) 1333333
WORK UNCERTIFIED AT COST = 1049000 -- 786750 = 262250
CA Ajay Thakkar
(Others)
(148 Points)
Replied 19 September 2016
AT CONTRACT PRICE AT COST
CONTRACT COMPLETED UP TO DATE 13,33,333 (2/3 X 20,00,000) 10,49,000
WORK CERTIFIED UP TO DATE 10,00,000 (1/2 X 20,00,000) ? (7,86,750)
(10,00,000 X 10,49,000)/13,33,333
WORK UNCERTIFIED AT COST = 1049000 -- 786750 = 262250
Pooja
(Student)
(22 Points)
Replied 12 December 2016
Shaurya Agarwal
(MEERUT)
(22 Points)
Replied 08 July 2017
ADD ALL EXPENSEES IN DR. AND LESS RALIVENT ITEMS THEN GOT 10,49,000
Vishal Pandit
(3 Points)
Replied 07 March 2018
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