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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.We need the expense from 1 July 20X5 to 30 June 20×6
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 🙂
I’m giving my F3 CBE next week! 🙂
you have helped me a lot so far 🙂 Thanks to you and the open tuition team 🙂Thank you , I wasted so much time on this question today. Helped me a lot too ???
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