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Hi John,
Could you please help me with the following question?
Details of a company’s insurance policy are shown below:
Premium for the year ending 31 March 20X6 paid April 2005 10,800
Premium for the year ending 31 March 20X7 paid April 2006 12,000What figures should be included in the company’s financial statements for the year ended 30 June ?
SPL? SOFP?
11,100 9,000 PREPAYMENT (DR)
11,700 9,000 PREPAYMENT(DR)
11,100 9,000 ACCRUAL (CR)
11,700 9,000 ACCRUAL (CR)Thanks
The expense required is the total from 1 July X5 to 30 June X6.
From 1 July X5 to 31 March X6 (9 months) = 9/12 x 10,800 = 8,100
From 1 April X6 to 30 June X6 (3 months) = 3/12 x 12,000 = 3,000.
The total expense is the two added together.The prepayment is 1 July X6 to 31 March X7 = 9/12 x 12,000 = 9,000
Hi Mike, another question i require help with.
A company’s telephone bill consists of 2 elements. One is a quarterly rental charge, payable in advance, the other is a quarterly charge made for callas made, payable in arrears. At 1 april 20x, the previous bill dated 1 march 20×9 had included line rental of 90.Estimated call charges during march 20×9 were 80.
During the following 12 months, bills totalling 2145 were received on 1 june, 1 september, 1 december 20×9 and 1 march 20Y0 each containing rental of 90 as well as call charges. Estimated call charges for March 20Y0 were 120.
What is the amount to be charged to the statement of profit and loss for the year ended 31 March 20Y0?
A-2185
B-2205
C-2155
D-2215Thanks
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