Prepayment - FSTM Sample Assessment 1
NotAFluke
Registered Posts: 3
Hi,
I'm going round in circles, please could you help me figure out how the prepayment figure on Q1 FSTM Sample Assessment 1 is 130?
Extract:
Insurance expenditure of £156,000, in respect of the period 1 May 20X1 - 30 April 20X2, was paid on 17 April 20X1. This cost is included in the distribution costs in the trial balance.
Distribution costs in the trial balance is £7,249k
Does anyone have the solution?
Thanks
NAF
I'm going round in circles, please could you help me figure out how the prepayment figure on Q1 FSTM Sample Assessment 1 is 130?
Extract:
Insurance expenditure of £156,000, in respect of the period 1 May 20X1 - 30 April 20X2, was paid on 17 April 20X1. This cost is included in the distribution costs in the trial balance.
Distribution costs in the trial balance is £7,249k
Does anyone have the solution?
Thanks
NAF
0
Comments
-
OK, mini brainwave.
£156,000 / 12 = £13,000
£13,000 * 10 months = £130,000
That's not it is it!? Why is it 10 months though?
NAF0 -
Distribution costs are £7,249,000
Insurance costs are £156,000 for 12 months.
In the further information it says the year end is 30th June 20X1.
Insurance costs were paid for between 1st May 20X1 - 30th April 20X2.
Therefore you will only include 2 months (£26,000) in the current year to take you up to 30th June 20X1.
And the prepayment for the following year would be £130,000.
Hope this helps!1 -
Cheers, I understand it now.daniel489 said:
Distribution costs are £7,249,000
Insurance costs are £156,000 for 12 months.
In the further information it says the year end is 30th June 20X1.
Insurance costs were paid for between 1st May 20X1 - 30th April 20X2.
Therefore you will only include 2 months (£26,000) in the current year to take you up to 30th June 20X1.
And the prepayment for the following year would be £130,000.
Hope this helps!0
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