Basset, a construction entity, prepares its accounts to 31 December 2001. 1 answer below »

Basset, a construction entity, prepares its accounts to 31 December 2001. During the year the entity undertook five contracts all of which commenced in the period and will require more than 12 months to complete.

The position of each contract at 31 December 2001 is as follows:

 

Contract

1001

1002

1003

1004

1005

 

$000

$000

$000

$000

$000

Contract value

1,800

390

260

4,800

2,000

Certified work to date

1,010

240

200

1,500

1,700

Progress payments received

1,300

200

200

1,900

1,400

Costs to be transferred to cost of sales

1,010

240

200

1,200

1,300

Costs incurred to date

1,310

240

200

1,450

1,400

In addition to the amounts transferred to cost of sales, foreseeable losses are anticipated on two   tracts: contract 1001 a loss of $50,000 and contract 1002 a loss of $80,000. Basset recognize turnover based on the value of work certified at the balance sheet date.

Requirement

Prepare a summary statement showing profits and losses on all five contracts and the related balance sheet totals for each.