The Notional Profit in a contract ending 31st March 2019 Rs 3 324 The value of Work certified R...........

Costing - Phase (I & II) Methods of Costing

The Notional Profit in a contract ending 31^st March, 2019: Rs. 3,324/-.

The value of Work certified: Rs. 20,000/-

The Contract Price: Rs. 35,000/-

Cash received being 75 % of Work certified

The amount of Notional Profit transferred to Profit and Loss Account and Work- in-Progress (Reserve):

Rs. 1,662/- and Rs. 1,662/-

Rs. 1,662/- and Rs. 1,500/-

Rs. 1,500/- and Rs. 1,500/-

Cannot be calculated

Profit and Loss Account= 2/3 x Notional Profit x Cash Received/ Work Certified= 2/3 x 3324 x 15000/20000= 1662/-

Work- in-Progress (Reserve)= Notional Profit – Amount of Profit and Loss account= 1662/-

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