# Foundation Workbook

New MemberRegistered Posts: 5
Hi everyone, this is my first post.

Just started studying the AAT foundation level and having a little trouble with
activity 2 in the workbook. On the 2nd of January it says you pay RENT of
£100, but how do you enter this, when in all previous examples it is taken from Profit. I have checked the answers at the back, but it does not make this problem any clearer, perhaps even more confusing. It leaves rent till last after everything else has been completed.

Thanks

• Well-Known Registered Posts: 166
hi
which page is it on? may be some one will be able to help but cant find it
in the book?
• New Member Registered Posts: 5

I am refering to Activity 2 on page 2 of the kaplan workbook units 1,2 and 3.
Look at 02 January
• Well-Known Registered Posts: 166
sorry I have the osbourne foundation accounting work book and tutorial book for units 1-4, I would
credit the bank, debit the rent account which is possibly no help whatsoever.
• New Member Registered Posts: 5
Perhaps I am being too specifc for those that do not study from Kaplan books.

I would like to know how you enter rent into the double entry book when there is no profit on the other side. Can you take it from capital to make the
books balance. Do you enter it as drawings? To me this would not make sense or follow the rules I have learnt this far, but i cannnot think of any other way at the moment. Any ideas?

Thanks
• Feels At Home Registered Posts: 37
I think the profit would be the sale of £830 less the value of stock bought in 10 January half of £10,000 which = £500. Therefore profit would= £830 - £500 = £330 then there is the rent on 2nd January which amounted to £100
which leaves the profit =£330 -£100= £230
• New Member Registered Posts: 5
Thanks for the reply, but I am still a little unclear. Your example accounts for rent after profit has been calculated at the end of the month. However in activity 1 where each entry is entered as it happens a bill is covered by
profit that is already there. I would like to know, what happens when there is no profit. In Activety we are asked what the equation would look like at the end of the month, but how would the equation look just after the rent was taken and how would it be entered.
• Feels At Home Registered Posts: 37
with the payment of rent on the 2nd January,

the bank will decrease by £100 and the profit will decrease by £100

Assets will go down by £100

Total Capital will go down by £100 as a result of profit going down by £100