MI – May 2022 – L1 – SB – Q2b – Costing Methods

Prepare accounts for two construction contracts using a columnar format.

Question

Wazobia is a construction company currently undertaking two separate contracts. From the following information relating to the just-concluded financial year and other data extracted from the records of the company, you are required to prepare accounts for the two contracts using a columnar format:

	Contract WXYZ002	Contract WXYZ003
Contract Price	₦5,000,000	₦3,500,000
Material Purchased	₦1,650,000	₦950,000
Plant & Machinery Transferred to Site	₦4,500,000	₦3,000,000
Wages Paid	₦1,460,000	₦1,200,000
Other Expenses	₦900,000	₦460,000
Wages Accrued	₦140,000	₦100,000
Value of Work Certified	₦2,950,000	₦1,800,000
Cost of Work Not Certified	₦1,600,000	₦1,450,000
Plant & Machinery Written Down	₦3,600,000	₦2,400,000
Material on Site C/F	₦850,000	₦100,000