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Can someone explain the following question?
The year end of M Inc is 30 November 20X0. The company pays for its gas by a standing order of $600 per
month. On 1 December 20W9, the statement from the gas supplier showed that M Inc had overpaid by
$200. M Inc received gas bills for the four quarters commencing on 1 December 20W9 and ending on 30
November 20X0 for $1,300, $1,400, $2,100 and $2,000 respectively.
Calculate the correct charge for gas in M Inc’s statement of comprehensive income for the year ended 30
November 20X0.Answer: $6800
Thanks 🙂
The SO amount is kind of irrelevant to the issue, that is the choice of the company
The payment method needs to be adjusted to match the charges for cash purposes, But how it is paid is irrelevant to the amount in the SOCI, the cost for the year is the amount that has been invoiced, as the Gas company invoice base on quarterly usage
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