Income Statement adjustment question...?

gabriellenlewis

Accounting period end- 30 June 2011:

insurance expenditure of £156, in respect of period 1 May 2011 to 30 April 2012, was paid on 17 April 2011.

How is the prepayment 130?

Thanks.

Helen39

Insurance expensed to year end June 2011 - 156/ 12 month x 2 months = £26 in P&L and remainder prepaid 10 months £130 as relates to following year.

Hope that helps