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Dear Tutor,
Details of a company insurance policy are shown below:
1. Premium for year ended 31 march 20×6 paid April 20×5 – $10800
2. Premium for year ending 31 March 20X7 paid April 20X6 – $12000
What figures should be included in the compnay financial statements for the year ended 30 June 20X6?– I have able to solve the SOFP (Prepayment) as from 30 June 20X6 – 31 March 20X7
12000X8/12 = 9000
But little bit confuse about the figures going on statement of P/L for the year ended 30 June 20X6.Please need your professional help.
Thanks
From 1 July X5 to 31 March X6 is 9 months and so 9/12 x 10,800.
From 1 April X6 to 30 June X6 is 3 months, and so 3/12 x 12,000.Add the two together and you have the total expense for the year ended 30 June X6.
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