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F3 doubt

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  • April 21, 2020 at 10:21 am
    F3 doubt 2
    pinkyjovin123
    Participant

    Hello sir,

    Charles indigo rents premises at an annual rate of $1000.The rates payable for the accounting year 1 July 2006-30 June 2007,his first year of business were $360.Cheques for rent and rates were paid as follows.

    20×6
    July 20×8 Rates for 9 months to 31 March 20×7
    220

    Sept 2008
    Rent for three months to 30 September 20×6
    250

    20×7
    Jan 3 Rent for three months to 31 December 20×6
    250
    March 28 Rent for three months to 31 March20x7
    250
    April 30 Rates for six months to 30 September 20×7
    280

    What rent and rates expense should be included in the cos statement that of profit or loss for the year ended 30 June 20×7 ?

    Answer is 1360

    Could you please help me to find the solution?

    Many thanks

    April 21, 2020 at 3:36 pm
    F3 doubt 3
    John Moffat
    Keymaster

    The rent is $1,000 per year (from the question).

    The question also says that the rates for the year ended 30 June 2007 are $360.

    Therefore the total expense is 1,000 + 360 = $1,360. When payments ere actually made is of no relevance.

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