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Prepayment

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Prepayment

  • This topic has 4 replies, 3 voices, and was last updated 9 years ago by Kerron.
Viewing 5 posts - 1 through 5 (of 5 total)
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  • May 14, 2015 at 12:04 am #245819
    Shanda
    Member
    • Topics: 46
    • Replies: 44
    • ☆☆

    Moira prepares its financial statements for the year to 30 April each year. The company pays rent for its premises quarterly in advance on January 1, April 1, July 1 and October 1 each year. The annual rent was $201600 per year until 30 June 2008. It was increased from that date to $230400 per year.

    What rent expense and end of year prepayment should be included in the financial statements for the year ended 30 April 2009?

    Can i see the calculation please?

    May 14, 2015 at 6:49 pm #245994
    Rasad
    Member
    • Topics: 55
    • Replies: 45
    • ☆☆

    201600×2:12=33600 and 230400×10:12=192000 33600+192000=225600 will transferred to Income ans expense account.(Rent expense)
    and 38400 will be transferred to Balance sheet as a prepayment. good luck.

    May 18, 2015 at 10:50 pm #247026
    Shanda
    Member
    • Topics: 46
    • Replies: 44
    • ☆☆

    Rasad I’d prefer if you explain as you go along please.thanks for answering.

    May 18, 2015 at 11:06 pm #247028
    Shanda
    Member
    • Topics: 46
    • Replies: 44
    • ☆☆

    how did you calculate the prepayment?

    June 7, 2015 at 2:12 am #254636
    Kerron
    Member
    • Topics: 5
    • Replies: 5
    • ☆

    Hi Shanda would you still like to get an explanation on this?

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