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- This topic has 5 replies, 3 voices, and was last updated 2 years ago by John Moffat.
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- February 4, 2017 at 8:27 pm #371072
Dear John,
It seems I have trouble to understand how the dates work…
Example from BPP practice question bank.44, Gamma co prepares its financial statements for the year to 30 September each year. The company pays the rent for its premises quarterly in advance on 1 February, 1 May, 1 August, 1 November each year. The annual rent was 120 000 per year until 30 April 20×8. It was increased from that date to 144 000per year.
What balances were included in the statement of profit or loss and the statement of financial position for the year ended 30 September 20×8?
I started to calculate:
120000x 4/12 (since the rent went up at the end of April and it is quarterly paid, the next payment was due at 1st of May)
+144000 x 8/12BUT
In the solution:
120000 x7/12 + 144 000x 5/12Could you please help me to understand why?
Thank you!
Kind regards,
KatalinFebruary 5, 2017 at 8:59 am #371114You want the expense for the period 1 October X7 to 30 September X8.
From 1 October X7 to 30 April X8 is 7 months and from 1 May X8 to 30 September X8 is 5 months.
February 5, 2017 at 9:44 am #371145Oh God I am so stupid…
Thank you very much John!
Have a nice Sunday.
Kind regards,
KatalinFebruary 5, 2017 at 4:00 pm #371191You are welcome 🙂
September 26, 2022 at 12:34 pm #667219Thank you man you are helping me a lot.
September 26, 2022 at 4:28 pm #667240You are welcome 🙂
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