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Hello
Could you please help me to understand the below question? Unfortunately I am not able to understand it even with the answer.
The Electricity account for the year ended 30 april 2005 was as follows:
Electricity accrued at 1 May 2004.
Payment made during the year in relation toQuarter ending 30 June 2014 400
Quarter ending 30 Sept 2004 350
Quarter ending 31 December 2004 425
Quarter ending 31 March 2005 450Which of the following is the appropriate entry for electricity?
Accred at 30 april 2005 150
Charge to income statement for year ended 30 april 2005 1525below the Electricity T account
DR Bank 400 CR Balance B/F 250
DR bank 350 Income statemnet 1525
dr bank 425
dr bank 450
balance C/F 1501775 1775
No problem with the Balance B/F of 250 as accrual from 2004, but I canno figure out where Balance C/F of 150 come from
Unfortunately the book does not provide any calculation.
Thanks a million
Gabbi
They have only paid rent up to 31 March, so at 30 April they owe for one month.
The latest 3 months to March cost 450, so estimate for one month is 450/3 = 150
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