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I assume that you have looked at the printed answer?
We need to know the cost of using the telephone for the 12 months from 1 January 2006 to 31 December 2006.
The first bill listed is not relevant because it is the cost for three months to the end of November 2005.
The second bill is for Dec 05, Jan 06 and Feb 06. Only the second two months are part of our year and so the cost of them is 2/3 x 798.00
The whole of the next 3 bills cover months in our year – March through to end of November.The final bill is for 3 months – Dec, Jan & Feb – and only December is part of our year and so the cost for December is 1/3 x 966.00
When the bills are received is irrelevant, When they are paid is also irrelevant when calculating the expense for the year (it would only be relevant for calculating any accrual of pre payment at the end of the year for the Statement of financial position).
i still didnt get how are you taking the bills. first bill is for nov,dec and jan so the amount in SOFP should be 739.2 X 1/3 and the second bill should be included the whole amount. plz explain me
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