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Hello sir,
Light stores received electricity bills quarterly..it paid the following electricity bills during its accounting year ended 28 Feb 20×7.
Date paid
04.06.06 (covering quarter ended 31.05.2006)
70.50
05.09.06 (covering the quarter ended 31.08.2006). 81.8002.12.2006 (covering the quarter ended 30.11.2006) 100.20
10.02.2007 (covering the two months to 28.01.2007) 108
On 3.06.2007 an electricity bill was received for $105 covering the quarter ended 30.04.2007
On the basis of the above data calculate the electricity expense to be charged to the statement of profit or loss for the year ended 28 Feb 2007 and calculate the amount of any accrual or prepayment at the end of the year ?
Answer is expense 395.5
Accrual 35Could you please help me with the solution
Thank you
It seems as though you have not watched my free lectures on accruals and prepayments, and I suggest that you do.
The expense for March, April, and May 2006 is $70.50
The expense for June, July and August 2006 is $81.80
The expense for Sept, Oct, and Nov 2006 is $100.20
The expense for Dec 2006 and Jan 2007 is $108.00
The expense for Feb 2007 is 1/3 x $105 = $35.00 (and this is the accrual because it had not been paid at the end of the year)The total is $395.50
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