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Hi tutor,
Can you show me how to figure out this? Because I haven’t watch the lecture so I completely have no idea how to solve it.
“A company receives rent from a large number of properties. The total received in the year ended 30 April 20X6 was $481,200.
The following were the amounts of rent in advance and in arrears at 30 April 20X5 and 20X6.
——————————————————————– 30 April 20X5—————-30 April 20X6
—————————————————————————– $ ——————————-$
Rent received in advance —————————————-28,700————————31,200
Rent in arrears (all subsequently received)——————-21,200————————18,400What amount of rental income should appear in the company’s statement of profit or loss for the year ended 30 April 20X6?”
Why do you not watch the lectures? Then you might find it more easy!
The cash we received was 481200.
However, at the end of last year we were owed 21200, so 21200 of the cash received this year is last years income, not this years income and so needs removing.
Also, at the end of last year we had already received 28700 which is income for this year.This means that so far, the income for this year is 481200 – 21200 + 28700 = 488700
However, at the end of this year, we have received 31200 in advance. So this is included in the cash we have received but it is not this years income and needs removing.
Finally, at the end of this year we are still owed 18400. This is not included in the cash received, but it is this years income and so needs adding.So the final figure for this years income is 488700 – 31200 + 18400 = 475900
(You had better check my additions – it is early morning here 🙂 )
Thanks for your reply 🙂 I get it.
Oh and sorry for any inconvenient, because when I posted this, It was nearly the afternoon in my time zone, and next times I’ll check it before posting questions.
Thank you. 😀
No problem 🙂
(and don’t worry about time zones – I only mentioned that it was early morning as an excuse if I had made a silly arithmetic mistake!! 🙂 )
Ask whenever you like (if it is the middle of the night here then obviously I will not see it until the next day, and I will answer it then).
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