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Someone please help…
I’m having trouble understanding this answer…
Question 146 includes:
‘You are the audit senior working on the audit of Porthos for year ended 31 December 20X7…..Porthos earns a small amount of rental income by renting out surplus warehouse space to a local company. The rental agreement shows that annual rent from 1 March 20X5 was $24,000, increased from $21,000 per annum.
Question: You are using the proof in total calculation to assess the accuracy of rental income. Which of the following correctly shows the calculation which would be used?’
The correct answer is C ($21,600*2/12)+($24,000*10/12). But I thought it would be A $24,000 x 12/12 given that the year end to test is 31 Dec X7 (31 Dec X6 to 31 Dec X7).
Many thanks for anyone’s help!
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