M. Martins (Pty) Ltd is a construction company whose year end is 31 May. Contract 100 was started on 1 March 1998 and completed on 25 February 1999. The following information relates Contract 100 for the 1998 and 199 financial years.
31/12/1998 31/12/1999
Material R105 000 R10 000
Labour R60 000 R6 000
Overheads R55 000 R6 000
R 220 000 R22 000

Tender price R 305 000
Value of work certified to date R260 000 R305 000
Cash received to date R234 000 R274 500
Retention money R26 000 R30 500

At 31n 12/1998 the costs to complete the contract were estimated at R28 000.
Required
1.Draw up the contract account for the year ended 31/12/1998 and balance it without taking any profit into account.
2.The degree of completion may be arrived at by the cost or revenue basis. Show the amount of profit that would be taken to the income statement, using both bases.
3.Show the amount of profit that would be taken to the income statement at 31 /12/1999, where the following methods are used.
(a) Percentage of completion based on cost
(b) Percentage of completion bases on revenue.
(c) Complete contract method.

CONTRACT 100 ACCOUNT
DR
Material R105 000
Labour R 60 000
Overheads R55 000

[QUOTE=Teeh;2219414]CONTRACT 100 ACCOUNT
DR CR
Material R105 000 Work in progress R220 000
Labour R 60 000
Overheads R55 000

R220 000 R220 000

Work in progress R220 000

Please help me to continue with the other requirements.

Please be patient and wait until someone who can help with this comes along. We only have so many people and are here around our other lives. This is not only a more advanced topic (which I don't do), but that type of contract accounting may be something that's done differently where you are (and I'm not where you are). So you'll have to wait for someone who knows this, assuming they come.