June 2007 - Task 1.6

Hiya

Need some help please if you can.

Calculate the general expenses.

Can someone explain why i am having to work it out for 2 months and not 3, also why is there an accrual? As they have already paid it for 3 months havent they, so wouldnt that be a prepayment?

Thanks
Jackie :001_unsure:

Comments

  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    Year ending 31 march

    Electricity paid in may (at the start of a new financial year for the period 01 Feb. to 30 April.

    So the electricity payment for the period 01 Feb. to 31 March is missing (that’s why an accrual)

    So calculation

    135£ / 3= 45 £ for 2 month 90.00 Accrual

    General expense 1750£ at the end of the financial year
    Add the missing payment for 1 Feb. to 31 March 90

    1750£+90£=1840£

    I hope this helps

    katrin
  • jackiepowell
    jackiepowell Registered Posts: 72 ? ? ?
    I dont understand why it is missing as they paid it Feb-Apr - isnt march included in there?
  • KVeevers
    KVeevers Registered Posts: 67 ? ? ?
    because the payment was during may so after the 31 march(end of financial year)

    katrin
  • mapry
    mapry Registered Posts: 15 Dedicated contributor ? ? ?
    answer to task 1.6 June 07 FRA

    Hi, the year runs from 01 April 2006 to 31 March 2007.In May he paid a bill of £135 for a period ending 30 April which after our year end on the 31 March therefore there was an overdue of two months Feb and Mar. To get this its 135/3 x2 giving you 90.

    Gen Exp have a dr bal therefore since this is an accrual you
    Gen exp Acc
    Bank 1750
    Accrual B/d 90 to P&L 1840
    1840 1840

    HOPE THIS HELPS...:001_smile:
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