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Kirsty is preparing her financial statements for the year ended 31 December 2012 and discovers the following:
1 An electricity invoice dated 9 January 2013 has not been recorded and includes an amount for electricity consumed up to 31 December 2012 for $310
An employee expense claim dated 31 December for $90
An invoice for the company’s annual insurance premium of $3,000 for the period 1 December 2012 to 30 November 2013 was received and dated 2 January 2013
What amount should be included in Kirsty’s statement of financial position at 31 December 2012?
Sir , in book ans is (650 accrual and prepayment nil)
I Know , 310 and 90 will be record right and in ans there is 250 ? 310 +90+250 = 650
Can you explain me how 250 come ??The insurance premium of $3,000 is for the period 1 December 2012 to 30 November 2013 (which is 12 months), and has not yet been paid.
Our year ends on 31 December 2012 and so they need to accrue for the insurance for the month of December. 1/12 x 3,000 = $250.
Have you watched my free lectures on accruals and prepayments?
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