For Question 4: why is prepayment 3/4 x 28,800 and Expense (3/4 x 25,920 + 1/4x 28,800) and not Prepayment (1/4 x 28,000)0 and Expense (1/4×25,920 +3/4 x 28,800)?
The payment of 28,800 is for the period 1 April 2008 to 31 March 2009.
The year end is 30 June 2008, and so the period from 1 April 2008 to 30 June 2008 (i.e. 1/4) is an expense of the year, and the period 1 July 2007 to 31 March 2009 (i.e. 9/23) is prepaid.
Ghasssan says
I do not understand question 5 and 6. Can someone explain it please?
Jazan says
For Question 4: why is prepayment 3/4 x 28,800 and Expense (3/4 x 25,920 + 1/4x 28,800) and not Prepayment (1/4 x 28,000)0 and Expense (1/4×25,920 +3/4 x 28,800)?
John Moffat says
The payment of 28,800 is for the period 1 April 2008 to 31 March 2009.
The year end is 30 June 2008, and so the period from 1 April 2008 to 30 June 2008 (i.e. 1/4) is an expense of the year, and the period 1 July 2007 to 31 March 2009 (i.e. 9/23) is prepaid.
Jazan says
Thank you. I totally left out the year ended 30 June, 2008