Published Accounts of Limited Companies

SusieQtips Registered Posts: 65 Regular contributor ⭐
Can anyone help me I'm getting really confused on my homework question?

I have a trial balance as at 31 March showing Admin Exps of £6589k.
The company hired temporary office space for 1 March - 31 May for £144k paid in March.

I've established that it is a prepayment of £96k.
On the Income statement do I add £144k to admin exps (assuming it is classed as admin exps) = £6733k and then put the £96K as a current asset under Trade & other receivables on the statement of financial position?

There are so many figures all going under the same headings(that i still haven't got my head round yet) that i am losing the plot. It seemed so much easier on a profit & loss and balance sheet.

I would be grateful for any help as i have to hand it in tomorrow morning.


  • crispy
    crispy Registered Posts: 466 Dedicated contributor 🦉

    As the adjustment is a prepayment I would assume the 144k paid is already included in the total admin expenses of 6589k. Therefore the journal would just simply be: -

    Dr Prepayments 96
    Cr Admin Exps. 96

    The Admin Expenses would look like:

    Per TB: 6589
    Less: Prepayment (96)
    Expense for the Year: 6,493

    The 96 would sit on the balance under 'trade & other receivables' as suggested.

    Looks like you have it right to me.
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