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Hi guys. This one is from the Kaplan test questions on page 437. Have no idea how to figure it out:
The Electricity account for the year ended 30 April 2005 was as follows:
Electricity accrued at 1 May 2004 $250
Payments made during the year in relation to:
Quarter ending 30 June 2004 $400
Quarter ending 30 September 2004 $350
Quarter ending 31 December 2004 $425
Quarter ending 31 March 2005 $450Which of the following is the appropriate entry for electricity?
Accrued at 30 April 2005 Income statement charge year ended 30 April 2005
A $Nil $1375
B $150 $1525
C $300 $1675
D $450 $1825Does anyone know the correct answer or how to find it?
They have paid up to the end of March. Their year end is end April, so they need to accrue for one months electricity.
Since the most recent payment was 450 for three months, you have to estimate that the amount owing for one month is 150 (450 / 3)
So the answer is B
Thanks very much John! Much appreciated.
Any idea about this one?
In May, Sunshine sold inventories on sale or return terms for €4,000. The cost to Sunshine was €1,600. The transaction has been recorded as a credit sale in Sunshine’s financial statements for the year ended 31 May 2013. In the past, some customers have returned inventories under this arrangement.
In June 2013, the customer accepted half of the inventories and returned the other half in good condition.
What adjustments, if any, should be made to the financial statements for the period ended 31 May 2013?(A) No adjustments required.
(b) Sales and receivables should be reduced by €4,000 and closing inventories increased by €1,600.
(c) No adjustments to sales or receivables but closing inventories should be increased by €800.The answer is (B). But if only half the goods are returned shouldn’t only have of the revenue by subtracted? Not all of it!? (4,000)
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