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Another question, Sir:
“At 1 July 2013, a company had prepaid insurance of $8,200. On 1 January 2014, the company paid $38,000 for insurance for the year to 30 September 2014.
What figure should appear for insurance in the company’s financial statements for the year ended 30 June 2014?”The correct answer is $36,700 of Insurance expense on the Income Statement and $9,500 of Prepayments on the Statement of financial position, right?
Was it true when I added $8,200 and $38,000 and then subtracted the total from $9,500 (=$38,000*3/12) to calculate insurance expense for the year ended 30 June 2014?
Thank you so much!Mr. John,
“Grantham’s non-current assets register shows a balance of $345,000, and his ledger accounts a non-current asset carrying value of $348,000. Which of the following would explain this discrepancy in full?”
The answer is “An addition of $15,000 has not been recorded in the register and a disposal was deducted as proceeds of $12,000 rather than carrying value of $22,000. In the ledger account, the depreciation charge of $2,000 relating to an asset was charged twice.”
I cannot understand this situations. Can you give me some explanations for this answer, please?