- This topic has 2 replies, 2 voices, and was last updated 12 years ago by
.
- Posts
In the year ended 31 December 2003, Alex made the following payments: Rent Rs 1,000; electricity Rs 630; stationery Rs 420.
In addition, he had received Rs 300 rent from a tenant.
At 31 December 2003, Alex had prepaid rent of Rs 200, accrued expenses were electricity Rs 180 and stationery Rs 130. The stock of stationery was Rs 140. The tenant owed rent of Rs 100.
Show how the accounts concerned will appear in Alex’s books, showing clearly amounts to be transferred to P&L.Let start Rent payable
Dr Rent payable(expense) 1000
Cr cash or bank 1000
(paid in year 1000)
then at the year end prepayment – means 200 paid relate to next financial year
so remove from profit and loss account to balance sheet
Cr Rent receivable(P+L) 200
Dr Prepayments(BS) 200
Closing balance rent payable for the year = 800DrElectricity
Paid in year
Dr Electricity (P+L) 630
Cr cash/bank 630
Then at the end of year accrual for 180 – means invoice not yet received from supplier and posted but we know it is going to be charged to current year
Dr Electricity (P+L) 180
Cr Accruals (BS) 180
Balance electricity in total 630 + 180 = 810DRStationery
Paid in year
Dr Stationery (P+L) 420
Cr Cash/bank 420
Then accrued 130 – the same concept as electricity
Dr Stationery(P+L) 130
Cr Accruals (BS) 130
But then is said the 140 is the closing stock at the end of year – it means is has not been used in year and it is not the current year expense – will be used in next year so should be removed from P+L
Cr Stationery 140
Dr Closing stock 140
Balance of stationery a/c in P+L 410DRRent receivable (income)
Received
Cr Rent receivable 300
Dr Cash/bank 300
Then tenant is due 100 at the year end – so debtor
Cr Rent receivables(P+L) 100
Dr Debtors)BS) 100
Balance Rents receibvabkes 400CrOther balances
Dr Prepayments 200
Accrued exp Cr 180 electricity plus 130 stationery
Closing stock Dr 140 stationery
Debtors Dr 100 rent from tenantLet start Rent payable
Dr Rent payable(expense) 1000
Cr cash or bank 1000
(paid in year 1000)
then at the year end prepayment – means 200 paid relate to next financial year
so remove from profit and loss account to balance sheet
Cr Rent receivable(P+L) 200
Dr Prepayments(BS) 200
Closing balance rent payable for the year = 800DrElectricity
Paid in year
Dr Electricity (P+L) 630
Cr cash/bank 630
Then at the end of year accrual for 180 – means invoice not yet received from supplier and posted but we know it is going to be charged to current year
Dr Electricity (P+L) 180
Cr Accruals (BS) 180
Balance electricity in total 630 + 180 = 810DRStationery
Paid in year
Dr Stationery (P+L) 420
Cr Cash/bank 420
Then accrued 130 – the same concept as electricity
Dr Stationery(P+L) 130
Cr Accruals (BS) 130
But then is said the 140 is the closing stock at the end of year – it means is has not been used in year and it is not the current year expense – will be used in next year so should be removed from P+L
Cr Stationery 140
Dr Closing stock 140
Balance of stationery a/c in P+L 410DRRent receivable (income)
Received
Cr Rent receivable 300
Dr Cash/bank 300
Then tenant is due 100 at the year end – so debtor
Cr Rent receivables(P+L) 100
Dr Debtors)BS) 100
Balance Rents receibvabkes 400CrOther balances
Dr Prepayments 200
Accrued exp Cr 180 electricity plus 130 stationery
Closing stock Dr 140 stationery
Debtors Dr 100 rent from tenant
- You must be logged in to reply to this topic.