GENIUS Business School

Accruals and Prepayments (From Kaplan Exam Kit – Page 35 to 38)

5,400 12,300
453,600 440,000
6,700 13,400
 42,300 102,600
858,600 838,600
88,700 48,400

1 July 20X5 ―――― 30 June 20X6

• July 1 - Mar 31 =$10,800/12 x 9 = $8,100
• April 1 - June 30 = $12,000/12 x 3 = $3,000

Prepayment
• July 1 - Mar 31 =$12,000/12 x 9 = $9,000
GENIUS Business School

1 Feb 20X5 ―― 31 Jan 20X6

• Feb 1 - June 30
=$24,000/12 x 5 = $10,00
• July 1 - Jan 31
= $30,000/12 x 7 = $17,500
Income in advance
=$30,000/12 x 2 = $5,000

80 95
340 385
120
60
GENIUS Business School

1 Dec 20W9 ―――― 30 Nov 20X0

=$1,800/12 x 7
= $1,050

Prepayment
=$1,800/12 x 5 = $750
 300
3,060 3,320
560
GENIUS Business School

1 Jan 20X3 ―― 31 Dec 20X3

• Jan 1 - June 30 =$12,000/12 x 6 = $6,000
• July 1 - Dec 31 = $13,200/12 x 6 = $6,600

1 Oct 20X5 ―― 30 Sep 20X6

• Jan 1 - Sep 30
= ($100,000 x 12%) x 9/12 = $9,000
Accrual
= $12,000 x 3/12 = $3,000
GENIUS Business School

10,000
25,000
36,000
21,000
GENIUS Business School

1 Nov 20X3 ―― 31 Oct 20X4

• Prepaid Rental Charge =$60/3 x 2 = $40
• Accrued Usage Charge = $135/3 x 1 = $45