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pls look at the problem. the answer given is B. is there a mistake?
regards
yes, I noticed that too.
Or is it 1 month on from the year end of 30/11 or is the year end 31/12 and not 30/11 as posed in the opening statement of the question and not the question itself,
OR
was this a trick question and are we to assume that the details given are incorrect and use 31/12 as year end not 30/11 – even so then it’s 2 months prepaid not 1 month ?
so then the answer is incorrect anyway.
Perhaps someone could clarify this please as it’s very difficult to know if I’m approaching the question incorrectly or the answer is incorrect.odd that none of the tutors has replied.. they r usually very very prompt
Hi Mansoor,
Are they?
well this is my first time posting and hoping to see that I’m not losing my marbles.
There also seems to be a few other incorrect answers in this module, have you found any more yourself ?
I’m up to Incomplete records and have just posted another question in Example 2 because I’ve been trying to figure out where I went wrong on the answer and either I’ve missed something or the answer given is incorrect.
Have you got this far yet ?This is Example 2 on Incomplete records that I posted the query on, it wasn’t a question just an example but the answer was wrong (I think!)
I see no-one has replied to this query.
Can we get a system in place whereby a question is replied to within a certain amount of time?
These forums would be very beneficial then if this were to happen.
Apologies if we are pointing out errors but I believe it is the users feedback that makes all systems work better and can help you to improve and make the experience better for all involved.
These notes are fantastic in other ways but there seem to be quite a few incorrect ones in the FA2 notes from 2014 and 2015.I would presume that we are correct in our replies but having incorrect answers or questions in the notes does not help with the studying.
Adrienne
The answer should be:
Prepayment at 31/12/2013 = 11/12 x 2,400 = 2,200
Prepayment at 31/12/2014 = 11/12 x 3000 = 2,750Expense = 2,200 + 1/12 x 3,000 = 2,450.
Sorry for the error. We will amend answer B.
Hi
The question states that it was paid in October for year end 30/11 so the question needs to be changed to paid in nov and year end is 31/12 for the one month prepayment to apply.
Or keep the year end to 30/11 and one month prepayment still applies.Does that sound right to you ?
In October 2013, insurance of $2,400 was paid for the year to 30/11/2014. In October 2014,insurance of $3,000 was paid for the year to 30/11/2015.
What expense for insurance should be shown in the income statement for the year ended
31/12/2014, and what accrual or prepaymentExpense: 1/1/2014 – 31/12/2014.
We need to find the insurance for those 12 months. There is no reason why an insurance policy term matches the accounting period.
The $2,400 paid in October 2013 is for insurance 1/12/2013 – 30/11/2014. So, 11/12 of that relates to y/e 31/12/2014 = 2200 (a prepayment as at 31/12/2013)
We still need insurance for the month of 12/2014 and that will be 1/12 x 3000 = 250
Total expense = 2450 and the prepayment is the rest of the 3,000 ie 3000 – 250 = 2750
Answer B will be changed to say:
B Expense $2,450; prepayment 31/12/2013 = $2,200; prepayment 31/12/2014 = $2,750
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