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Hi!
I have come across a question and I am not sure how it is worked out, maybe there is a misprint?
Question;The electricity account for the year ended 30 June 2013 was as follows;
Opening balance for electricity accrued at 1 July 2012 300
Payment made during the year:
1 Aug 2012 for three months to 31 July 2012 600
1 Nov 2012 for three months to 31 Oct 2012 720
1 Feb 2013 for three months to 31 Jan 2013 900
30 Jun 2013 for three months to 30 Apr 2013 840What was the expense charged to the SOPL for the year ended 30 June 2013 and the accrual at 30 June 2013?
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I would really appreciate your assistance on how the charge for the 3 months after 30 april 2013 is calculated.As I explain in my free lectures on accruals and prepayments, if we do not know the actual charge for the three months to 30 July (as is likely to be the case in practice), we estimate it. In the exam we estimate by assuming it continues at the same rate as the last invoice available.
So in this case we estimate it as being 840, and therefore the accrual at 30 June will be 2/3 x 840 = $560.
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