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The electricity amount for the year ended 30 april 2005:
Electricity accrued at 1 May 2004 – $250
payment made:
quater ending 30 june 2004 – $400
quater ending 30 sep 2004 – $350
quater ending 31 dec 2004 – $425
quater ending 31 march2005- $450
Answer: The electricity accrual $150 and IS charge $1525.
I can’t calculate this amount. Kindly help me to solve this accrual and income statement charge sir!We need the expense for the 12 months from 1 May 2004 to 30 April 2005.
The cash actually paid was 400 + 350 + 425 + 450 = 1625.
However this includes 250 that was owing at the end of last year (and was therefore paid this year), that brings it down to 1625 – 250 = 1375
Also, however, we have only paid up to 31 March 2005 and so we are still owing for April.
Since the 3 months to March cost 450, we have to assume that the one month of April will cost 1/3 x 450 = 150 (the accrual therefore at the end of the year).So the total expense is 1375 + 150 = 1525.
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