This contract gives a company exclusive rights to all recordings of any form made by a recording artist for a period time in exchange for royalties.
Recording Of Contract Costing
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How to fill out Exclusive Recording Contract Or Agreement With Recording Artist?
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FAQ
It must be valued at cost. It is shown on the credit side of the contract account and also on the assets side of the Balance sheet along with work certified.
WORK CERTIFIED It is always valued as some % of contract price and hence includes profit. = Contract Price x Work Certified as % of Contract Price. = Cash received / Cash received as % of Work Certified.
The cost price of the plant or book value of the plant, if the plant is old, is debited to the contract, the corresponding credit being given to the plant account. When the plant is returned, the depreciated value is credited to the contract, the corresponding debit being given to the plant account.
As the contract is carried out at the customer's place, all expenses incurred for the execution of that contract become direct costs. All direct costs such as material cost, wages, cost of special plant and equipment, cost of special services like architect's fees, etc., are debited to the Contract account.
Contract receiving the materials is debited and the contract giving up the materials is credited. Normal wastage incurred in stores and materials should be charged to contracts by inflating the fates at which materials are priced out. Stores used in the manufacture of tools should be charged to Works Expenses A/c.