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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