Details of a company's insurance policy are shown below:
Premium for year ended 31 March 20X6 paid April 20X5 $10,800
Premium for year ending 31 March 20X7 paid April 20X6 $12,000
What figures should be included in the company's financial statements for the year ended 30 June 20X6?
...SPL ...............SOFP
....$ ......................$
A 11,100.... 9,000 prepayment (Dr)
B 11,700.... 9,000 prepayment (Dr)
C 11,100.... 9,000 accrual (Cr)
D 11,700.... 9,000 accrual (Cr)
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Please help me on this one...I am able to do it till the point of obtaining the prepayment figure, but the SPL figure is troubling me.
Ask the Tutor ACCA FA
Prepayments
10y ago#1We need the expense from 1 July 20X5 to 30 June 20x6
From 1 July 20X5 to 31 March 20X6 is 9 months, so the expense = 9/12 x 10,800.
From 1 April to 30 June X6 is 3 months, so the expense = 3/12 x 12,000.
Add the two together to get the total expense :-)
Oh it was that simple! thanks alot! :)
I'm giving my F3 CBE next week! :)
you have helped me a lot so far :) Thanks to you and the open tuition team :)
10y ago#4You are welcome, and good luck next week :-)
Thank you , I wasted so much time on this question today. Helped me a lot too ???
6y ago#6You are welcome :-)
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