ACCA FA · Guided practice (Show me how)
Chapter 4: Accruals and Prepayments
Accruals and prepayments - charging the expense of the period
Deborah started business on 1 January 2010. During the year to 31 December 2010 she made the following payments of rent.
| Date paid | $ | Period covered |
|---|---|---|
| 4 January 2010 | 1,800 | the 4 months to 30 April 2010 |
| 28 April 2010 | 2,700 | the 6 months to 31 October 2010 |
| 26 October 2010 | 1,800 | the 4 months to 28 February 2011 |
Deborah had no rent account before 1 January 2010, because the business did not exist.
(a) The rent account
Prepare Deborah's rent account for the year ended 31 December 2010, showing the rent transferred to the statement of profit or loss and the prepayment carried forward.
(b) The financial statement extracts
Show the extracts from the statement of profit or loss for the year ended 31 December 2010 and from the statement of financial position at that date.
Opening this exercise…