Accruals and Prepayments — OpenTuition Forums

SSourav6y ago

Sorry to bother you with exam kit questions but Sir, I tried so hard but I'm not getting this question.Sorr L owns two properties which it rents to tenants.Inthe year ended 31 December 20X6,it received $280,000 in respect of property 1 and $160,000 in respect of property 2. Balances on the accured income and prepaid expenses accounts are 31st December 20X6. 31 December 20X5 Property 1. 13400 Dr. 12,300 Cr Property 2. 6700 Cr. 5400. Dr What amount should be credited to SOPL for year ended 31 St December 20X6 in respect of rental income? (Answer: 453600)

John MoffatTutor6y ago#1

The easiest is to write up t-accounts for each of the two properties. For property 1, you know the opening and closing balances and you will credit the account with the 280,000 received. The missing figure is 305,700 and this is the income for the year. For property 2, again you know the opening and closing balances and you will credit. the account with the 160,000 cash received. The missing figure on this account is then 147,900and this is the income for the year. So the total income is 305,700 + 147,900 = 453,600.