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Accruals & prepayments question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Accruals & prepayments question

  • This topic has 5 replies, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • June 7, 2016 at 8:39 pm #320596
    faze
    Participant
    • Topics: 15
    • Replies: 40
    • ☆☆

    Hi John,

    Could you please help me with the following question?

    Details of a company’s insurance policy are shown below:

    Premium for the year ending 31 March 20X6 paid April 2005 10,800
    Premium for the year ending 31 March 20X7 paid April 2006 12,000

    What figures should be included in the company’s financial statements for the year ended 30 June ?

    SPL? SOFP?
    11,100 9,000 PREPAYMENT (DR)
    11,700 9,000 PREPAYMENT(DR)
    11,100 9,000 ACCRUAL (CR)
    11,700 9,000 ACCRUAL (CR)

    Thanks

    June 8, 2016 at 8:19 am #320708
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    The expense required is the total from 1 July X5 to 30 June X6.

    From 1 July X5 to 31 March X6 (9 months) = 9/12 x 10,800 = 8,100
    From 1 April X6 to 30 June X6 (3 months) = 3/12 x 12,000 = 3,000.
    The total expense is the two added together.

    The prepayment is 1 July X6 to 31 March X7 = 9/12 x 12,000 = 9,000

    June 8, 2016 at 7:48 pm #321079
    faze
    Participant
    • Topics: 15
    • Replies: 40
    • ☆☆

    Thank you John, this makes perfect sense!

    June 9, 2016 at 8:21 am #321344
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    You are welcome 🙂

    June 11, 2016 at 12:47 pm #322374
    faze
    Participant
    • Topics: 15
    • Replies: 40
    • ☆☆

    Hi Mike, another question i require help with.

    A company’s telephone bill consists of 2 elements. One is a quarterly rental charge, payable in advance, the other is a quarterly charge made for callas made, payable in arrears. At 1 april 20x, the previous bill dated 1 march 20×9 had included line rental of 90.Estimated call charges during march 20×9 were 80.

    During the following 12 months, bills totalling 2145 were received on 1 june, 1 september, 1 december 20×9 and 1 march 20Y0 each containing rental of 90 as well as call charges. Estimated call charges for March 20Y0 were 120.

    What is the amount to be charged to the statement of profit and loss for the year ended 31 March 20Y0?

    A-2185
    B-2205
    C-2155
    D-2215

    Thanks

    June 12, 2016 at 8:10 am #322499
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    Why on earth do you call me John in the first two messages and then decide to call me Mike?

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
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