- This topic has 1 reply, 2 voices, and was last updated 8 years ago by
.
- Posts
1.A company has occupied rented premises for some years , paying an annual rent of $120000.From 1 April 2006, the rent was increased to $144000 per year.Rent is paid quarterly in advance on 1 january, 1April, 1July and 1 october each year. What figures should appear for rent in the company’s financial statements for the year ended 30 November 2006?
Income statement Balance sheet
A.136000 Prepayment 12000
B.136000 Prepayment 24000
C.138000 Nil
D.136000 Accrual 12000I have obtained Income statement which is 136000 but I am facing problem in finding the Balance sheet.
Please help!!!!Q2. At 1 July 2004, a company had prepaid insurance of $ 8,200.On 1 January 2005, the company paid $38000 for insurance for the year to 30 September 2005.
What figures should appear for insurance in the company’s financial statements for the year ended 30 June 2005?
Income statement Balance Sheet
A.27200 Prepayment 19000
B.39300 Prepayment 9500
C.36700 Prepayment 9500
D.55700 Prepayment 9500Sir, the question is quite tough .Help please
1. The last payment of rent before the year end of 30 November will have been on 1 October. Because it is paid in advance, this payment will have been for October, November and December.
Therefore they will have overpaid – a prepayment – for one month at the rate of $144,000 a year.2. The last payment before the year end of 30 June 2005 was on 1 January 2005. This payment was for 12 months to 30 September 2005 and so as at 30 June they will overpaid – a prepayment – of 3 months (July to September) at the rate of $38,000 a year.
- You must be logged in to reply to this topic.