Recent content by Shunmas

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    Journal Entry for Contract Retentions

    Yes @Merchant UK, its a homework question. @Scalloway: Thanks for your reply. Okay, so it will be: Cash...Dr. 280,000 Accounts Receivables...Dr. 70,000 Cr.....??? Credit is what ? This part I am not getting. I appreciate your help.
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    Journal Entry for Contract Retentions

    Hi All ! Merry Xmas and Happy New year ! When the contractor bills the contractee (the principal, for whom the construction work is being done), he passes the following journal entry: Accounts Receivables...Dr. $350,000 Billings on Construction in Progress ......Cr $350,000 Now if the...
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    Merchandise Business Question

    Hi All ! I need your help with 2 questions: Q1. Company XYZ imports raw soaps (without cover) and pays import expenses. It packages (just put covers on them using machine) the soap using its own machinery, where labour is working. It then sells those soaps. Now What should be included in...
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    Dividends Declared

    Thank you for your reply Teddys. I read it just now: Only the interim dividends are accounted for in the year (for which we are prepaying the accounts for, lets say 2010) and there will be no accounting for simply declaring dividends, which were declared in 2011) But since dividends...
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    Dividends Declared

    So we will just disclose these new dividends by way of a note in financial statements and no journal entry is passed ? Thanks
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    Dividends Declared

    Hi all ! I was going through a company's annual report and came across the following note: "During the year, the company paid dividends of 21.25 million as resolved by the board of directors (bod)" I can see the the above dividends paid in cash in cash flows statement. But there is another...
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    Accounting for L/C and L/Gs

    Hi All ! (1) Can an expert kindly help me with accounting entries for letter of credit and letter of guarantee ? (2) What does "opening of L/C" mean ? Thank you for your kind help. :)
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    General Accounting Question - Construction Contracts IAS 11

    Hello Experts ! This is a general accounting question related to construction contracts. What I analysed all myself that the following accounts are involved: 1. Construction-in-Progress (an asset account where all costs relating to contract are accumulated) 2. Retentions receivable...
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    Journal Entry

    Thanks Scalloway, so would a compound j/e be: Dr...Driver's Allowance 250 Dr...Fines 50 Cr. Bank 300 ??? Thank you for your support
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    Journal Entry

    Hello ! I am trying to get my head around this. Can anyone help please ? The driver's allowance from London to Manchester is 300. Any fine on his way has to be deducted from his allowance, lets say he incurred a fine of 50, which the company pays and then deducts from his allowance. Can...
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    Formation of Group Company & Subsidiaries

    Hello! Is it possible to form multiple companies at once including a group company and 2 or 3 wholly-owned subsidiaries ? Thank you...:)
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    Contract Accounting - Contractee's Books

    Thanks Scalloway.... For example, for getting legal work done regarding building the unit on land, we incurred £500. Would the J/E be: DR> Contract Account (Legal Expenses)---£500 CR> Cash Account---£500 If this is the J/E, then would the category of this account (Contract account)...
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    Contract Accounting - Contractee's Books

    Thank you for your reply. I think the third entry would also include >> DR.CASH>>CR.SALES So in a nutshell, we can summarise this through the following short scenario: On 1 January 2011, ABC contracted XYZ to build a single housing unit for £100,000. XYZ started the work. On 20 January, ABC...
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    Contract Accounting - Contractee's Books

    Thank you Scalloway. Yes if I sell houses after getting them built from contractors, I would show them as WORK IN PROGRESS. Now the question is: 1. Would they be classified as Current or Non Current Asset ? 2. Would the J/E be DR.>> Work in Progress Account CR.>>Contractee's Personal Account...
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    Contract Accounting - Contractee's Books

    HI E Storey ! Thank you for your reply. Well I haven't found the answer in any book though. They always show journal entries from contractor's perspective. But after posting this thread, I searched it on google and found that: Contract Account is by nature a Profit & Loss Account. Any Income...
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