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Accruals

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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September 20, 2023 at 1:13 pm #692327
Mayoogha
Participant
- Topics: 1
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At 1 20X4acompany had prepaid insurance of$8,200. On 1 January 20X5 the company paid$38,000 for insurance for the year to 30September 20X5. What Figures should appear for insurance in the company’s financial statements forthe year ended 30June20X5?
SOPL SOFP
$27200. Prepayment $19000
$39,300. Prepayment $9500
$36,700 . Prepayment $9500
$9,500. Prepayment $9500
Sir here insurance paid cover for only jan -sep so 9 months therefore we should do 38000*6/9 for calculating charge to sopl right?
September 20, 2023 at 3:43 pm #692337
John Moffat
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- Topics: 57
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No. The wording says that the 38,000 was for the year to 30 September 20X5 (i.e. from 1 October 20X4 to 30 September 20X5).The prepayment is for 3 months (1 July 20X5 to 30 September 20X5) and so is 3/12 x 38,000.
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