Avail 20% discount on updated CA lectures for Dec 21 .Use Code RESULT20 !! Call : 088803-20003

ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Lakshy (Semi-Qualified C.A. PGDFM BCom.)     02 December 2011

Contract costing doubt

friends,

pls explain how work certified and notional profit is calculated in the attached question.

Urgent



 16 Replies

ashish gupta

ashish gupta ( student)     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

CA PRABHAKAR JHA (ACA)     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,

 

Lakshy

Lakshy (Semi-Qualified C.A. PGDFM BCom.)     02 December 2011

Thanks prabhakar for detailed explainaiton......

1 Like
madinashabana11

madinashabana11 (MBA)     02 December 2011

Agree with friend Prabhakar............

prajith

prajith (Student)     21 October 2012

Mistake sir.....

Contract revenue should be 20lac * 66.67% =1333400

Profit (1333400-1049000)=284400

 

snata mohapatra

snata mohapatra (cs)     11 December 2013

How to calculate this work cost of 2/3 work completed????plzzz explain me sir....it's urgent
yamini mallireddy

yamini mallireddy (student)     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

SC Charuhas (student)     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

CA Ajay Thakkar (Others)     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

CA Ajay Thakkar (Others)     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

Pooja (Student)     12 December 2016

In the above answer; How do we get 10,49,000 ? Please help
Shaurya Agarwal

Shaurya Agarwal (MEERUT)     08 July 2017

ADD ALL EXPENSEES IN DR. AND LESS RALIVENT ITEMS THEN GOT 10,49,000

Vishal Pandit

Vishal Pandit   07 March 2018

the contract price rs 600000 and the amount certified by the architect,after deduction of 20% retention money,was rs 241600 the work being certified on 30 june 2016 what is the amount of work certified?
AUGUSTIN JEBAKUMAR. S

AUGUSTIN JEBAKUMAR. S   01 August 2020

Sir, 

 

How to find the amount 10,49,000/-


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Related Threads


Loading
Start a New Discussion

Popular Discussion


view more »







Subscribe to the latest topics :
Search Forum:



Trending Tags