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The electricity account for the year ended 30 june 20X1 was as follows.
Opening balance for electricity accrued at 1 July 20X0: 300 $
Payment made during the year:
1 August 20X0 for 3 months to 31/7/20X0: 600$
1 November 20X0 for 3 months to 31/10/20X0: 720$
1 February 20X1 for 3 months to 31/1/20X1: 900$
30 June 20X1 for 3 months to 30/4/20X1: 840$
1 August 20X1 for 3 months to 31/7/20X1: 840$Caculate the amount of accrued at 30/6/20X1 and charge to SPL year ended 30/6/20X1?
Many thanks 😀
Please do not simply set test questions and expect an answer – you must have an answer in the same book in which you found the question, so you should ask about whatever it is in the answer that you are not clear about. Then I will help you.
The total cash paid between 1 July 20X0 and 30 June 20X1 = 600 + 720 + 900 + 840 = 3,060
Subtracting the amount already owing at the start of the year gives 3,060 – 300 = 2,760
At the end of the year that had only paid up to the end of April, so they need to accrue for May and June. The accrual is therefore 2/3 x 840 = 560
Therefore the expense for the year = 2,760 + 560 = $3,320
Have you watched the free lectures on this? The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Thank you for your advice 🙂 , I will do like that in the next time. This question i took from ACCA revise kit 2016 – 2017, just I’mnot sure about the answer there:
– About first payment: 600$ I think it’s an expense covering for period from May to July/20X0 ( for 3 months to 31/7/20X0) and the financial year from 1/7/20X0 to 30/6/20X1 so I think first payment in SPL of year end 30/6/20X1 is 600 *1/3 ?
No – the accrual last year turns out to have been wrong, but we cannot go back and change last years accounts.
Again, are you watching the free lectures, because I explain this point in the lectures!
Yes sir, I watched free lecture as well as read lecture note and complete practice question but I think I should review it once again.
Thank you sir and really sorry about this inconvenience 🙂
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