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Cash received Rs. 4,80,000 (80% of Work certified); Notional Profit Rs. 50,000; Contract Price Rs. 30,00,000.?

Calculate the profit to be shown in Profit & Loss Account.

Profit Margins Work Orders Accounting For Profit Financial Data
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Question added by Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants
Date Posted: 2015/07/19
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Mohammed Asim Nehal
by Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants

(480,000/80) x100  =600,000   Work Certified

Profit to be taken to the credit of P & L a/c is  = Notional Profit x2/3 x80%.  50,000 x2/3 x80%

Avirup Banerjee

Value of work certified formula

RAEES PUTHANPURAYIL
by RAEES PUTHANPURAYIL , Audit Assistant , experience at Sudeep Thomas & Co. Chartered Accountants

50000x2/3x480000/3000000

 

notional profit x 2/3 x cash received /contract price

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