Download - okMaterial1_SolutionContract_Class1
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1 | P a g e / S o l u t i o n f o r C h a p t e r 2
REFERENCE: JUN2014/Q2/ACC280
Alam Bina Construction Bhd
Construction in Progress Account for the year ended 30 June 2014
RM RM
Direct material sent from store 50,000 Direct materials at site c/d 20,000
Direct material purchased from supplier 200,000 Direct material transferred to another contract 5,000
Direct wages paid 96,000 Sub-contractor work - prepaid c/d 15,000
Direct wages accrued c/d 4,000 Machine and Equipment at site c/d : Working 1 146,000
Site expenses paid 16,000
Site expenses accrued c/d 6,400
Sub-contractor work paid 100,000
Head office expenses paid 20,000
Hire of plant paid 60,000
Machine and equipment (at NBV) b/d 164,000
Other expenses incurred and paid 32,000
Manufacturing overhead (80% X RM100,000) 80,000 Cost of work to date c/d 642,400
828,400 828,400
Cost of work to date b/d 642,400 Contract Revenue 2,392,729Attributable Profit : Working 2 1,750,329
2,392,729 2,392,729
Direct Materials at site b/d 20,000 Direct Wages accrued b/d 4,000
Sub-contractor prepaid b/d 15,000 Site expenses accrued b/d 6,400
Machine and Equipment at site b/d 146,000
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2 | P a g e / S o l u t i o n f o r C h a p t e r 2
Working 1
Calculation for depreciation:
Depreciation of Machine and Equipment : (Cost - Scrap value) / Estimated Useful Life
= (RM200,000 - RM20,000)/ 10 years = RM18,000Thus, the net book value would be RM146,000, where:
Cost - Accumulated Depreciation = RM200,000 - (RM36,000 previous years + RM18,000 current year)
Working 2
Attributable Profit = Cost of Work to Date X Total Estimated Contract Profit
Total Estimated Contract Cost
= RM642,400 X RM3,657,600
RM1,342,400
= RM1,750,329
Total Estimated Contract Cost = COWTD + Any Further cost
= RM642,400 + RM200,000 + RM500,000
= RM1,342,400
Total Estimated Contract Profit = Contract Price - TECC
= RM5,000,000 - RM1,342,400
= RM3,657,600
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3 | P a g e / S o l u t i o n f o r C h a p t e r 2
Contractee Account/Accounts Receivable
RM RM
Value of work certified 2,000,000 Cash received 1,800,000
Balance c/d 200,000
2,000,000 2,000,000
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4 | P a g e / S o l u t i o n f o r C h a p t e r 2
REFERENCE: JAN2013/Q3/ACC280
Kukuh Bina Construction Ltd
Construction in Progress Account for the year ended 30 September 2012
RM RMPlant at cost 160,000 Materials at site c/d 6,500
Wages paid 34,000 Plant at site c/d : Working 1 128,000
Materials issued to site 360,000
Site expenses 18,000
Wages accrued c/d 12,800
Direct labour 48,000
Direct expenses 10,200
Sub-contractor paid 2,400
General overhead (40% X RM48,000) 19,200 Cost of work to date c/d 530,100
664,600 664,600
Cost of work to date b/d 530,100 Contract Revenue 757,028
Attributable Profit : Working 2 240,928 Value of work not certified 14,000
771,028 771,028
Materials at site b/d 6,500 Wages accrued b/d 12,800Plant at site b/d 225,000
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5 | P a g e / S o l u t i o n f o r C h a p t e r 2
Working 1
Calculation for depreciation:
Depreciation of Plant : (Cost - Scrap value) / Estimated Useful Life= (RM160,000 - RM0)/ 5 years = RM32,000
Thus, the net book value would be RM128,000, where:
Cost - Accumulated Depreciation = RM400,000 - (RM0 previous years + RM32,000 current year)
Working 2
Attributable Profit = Value of Work Certified X Total Estimated Contract Profit
Contract Price
= RM300,000 X RM2,569,900
RM3,200,000
= RM240,928
Total Estimated Contract Cost = COWTD + Any Further cost
= RM530,100 + RM100,000
= RM630,100
Total Estimated Contract Profit = Contract Price - TECC
= RM3,200,000 - RM630,100
= RM2,569,900
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6 | P a g e / S o l u t i o n f o r C h a p t e r 2
Working 1
Calculation for depreciation:
Depreciation of Plant : (Cost - Scrap value) / Estimated Useful Life= (RM160,000 - RM0)/ 5 years = RM32,000
Thus, the net book value would be RM128,000, where:
Cost - Accumulated Depreciation = RM400,000 - (RM0 previous years + RM32,000 current year)
Working 2
Attributable Profit = Value of Work Certified X Total Estimated Contract Profit
Contract Price
= RM300,000 X RM2,569,900
RM3,200,000
= RM240,928
Total Estimated Contract Cost = COWTD + Any Further cost
= RM530,100 + RM100,000
= RM630,100
Total Estimated Contract Profit = Contract Price - TECC
= RM3,200,000 - RM630,100
= RM2,569,900
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7 | P a g e / S o l u t i o n f o r C h a p t e r 2
Contractee Account
RM RM
Value of work certified/Progress Billing 300,000 Cash received 240,000
Balance c/d @ Retention Money 60,000
300,000 300,000