REFERENCE: JUN2014/Q2/ACC280

Alam Bina Construction Bhd

Construction in Progress Account for the year ended 30 June 2014
Direct material sent from store
Direct material purchased from supplier
Direct wages paid
Direct wages accrued c/d
Site expenses paid

RM

RM

50,000 Direct materials at site c/d

20,000

200,000 Direct material transferred to another contract

96,000 Sub-contractor work - prepaid c/d
4,000 Machine and Equipment at site c/d : Working 1
6,400

Sub-contractor work paid

100,000

Head office expenses paid

20,000

Hire of plant paid

60,000
32,000

Manufacturing overhead (80% X RM100,000)

80,000 Cost of work to date c/d

828,400

Attributable Profit : Working 2

146,000

164,000

Other expenses incurred and paid

Cost of work to date b/d

15,000

16,000

Site expenses accrued c/d

Machine and equipment (at NBV) b/d

5,000

642,400
828,400

642,400 Contract Revenue

2,392,729

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
1|Page/ Solution for Chapter 2

Working 1
Calculation for depreciation:
Depreciation of Machine and Equipment : (Cost - Scrap value) / Estimated Useful Life
= (RM200,000 - RM20,000)/ 10 years = RM18,000
Thus, 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 Cost

Total Estimated Contract Profit

= 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
2|Page/ Solution for Chapter 2

Contractee Account/Accounts Receivable

Value of work certified

RM
2,000,000 Cash received
Balance c/d
2,000,000

RM
1,800,000
200,000
2,000,000

3|Page/ Solution for Chapter 2

REFERENCE: JAN2013/Q3/ACC280

Kukuh Bina Construction Ltd

Construction in Progress Account for the year ended 30 September 2012
Plant at cost
Wages paid
Materials issued to site
Site expenses
Wages accrued c/d
Direct labour
Direct expenses
Sub-contractor paid
General overhead (40% X RM48,000)

RM
160,000 Materials at site c/d
34,000 Plant at site c/d : Working 1
360,000
18,000
12,800
48,000
10,200
2,400
19,200 Cost of work to date c/d
664,600

RM
6,500
128,000

Cost of work to date b/d

Attributable Profit : Working 2

530,100 Contract Revenue

240,928 Value of work not certified

757,028
14,000

771,028

771,028

Materials at site b/d

Plant at site b/d

6,500
225,000

Wages accrued b/d

530,100
664,600

12,800

4|Page/ Solution for Chapter 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

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

Total Estimated Contract Profit

5|Page/ Solution for Chapter 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

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

Total Estimated Contract Profit

6|Page/ Solution for Chapter 2

Contractee Account
Value of work certified/Progress Billing

RM
300,000 Cash received
Balance c/d @ Retention Money
300,000

RM
240,000
60,000
300,000

7|Page/ Solution for Chapter 2