Accurals

This topic has 5 replies, 2 voices, and was last updated 8 months ago by John Moffat.

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May 22, 2022 at 2:52 pm #656188
dhruvakedia
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A company has taken a loan of 360,000 on 1 may 20X6 at the rate of 10% p.a . The interest is payable every six month in arrear. Calculate the accrued interest for the year ended 30 April 20X6??
Sir my ans is coming
360,000×10%×2/12 = 6000
But it is wrong sir can you calculate the right ans?
May 22, 2022 at 4:38 pm #656199
John Moffat
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Two things.
Firstly interest isn’t accrued for the year – it is accrued at the end of the year.
Secondly however, I think you must have your dates wrong. Given that they did not take out the loan until 1 May 20X6, there is no accrued interest at 30 April 20X6 (because there was no loan as at that date!!!).
May 23, 2022 at 5:00 am #656226
dhruvakedia
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Sorry sir my mistake it was the loan was taken on 1 March 20X6
May 23, 2022 at 8:36 am #656238
John Moffat
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If you have now copied the question correctly, then the accrued interest is indeed $6,000.
If this is a question from the current edition of the BPP Revision Kit then tell me the number of the question and I will check.
May 23, 2022 at 9:35 am #656244
dhruvakedia
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No sir it is from a different book
May 23, 2022 at 8:06 pm #656274
John Moffat
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In that case it seems as though your book has made a mistake if their answer is different!!
Best always is to use a Revision Kit from one of the ACCA Approved Publishers (BPP or Kaplan).
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