Q4. A business prepares its financial statements for the year to 31 October.It pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year.The annual rent was increased from £48,000 to £60,000 from 1 March 2021.●Compute the amount to recognise for rent in the financial statements for the year ended 31October 2021?a) in the statement of profit or loss?b) in the statement of financial position?c)If at the start of the year there was an opening rent prepayment of £8,000, show how thetransaction for the year would be reflected in the accounting equation.Use the template on Moodle to show which elements of the accounting equation areaffected by entering the amount and a +/- sign to denote the increase/ decrease+ Expenses = Opening capital + Income + LiabilitiesAssets

Accounting System - A technique used by accountants to manage and keep track of transactions…

Q4. A business prepares its financial statements for the year to 31 October. It pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from £48,000 to £60,000 from 1 March 2021. ● ● Compute the amount to recognise for rent in the financial statements for the year ended 31 October 2021? a) in the statement of profit or loss? b) in the statement of financial position?

Q4. A business prepares its financial statements for the year to 31 October. It pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from £48,000 to £60,000 from 1 March 2021. ● ● Compute the amount to recognise for rent in the financial statements for the year ended 31 October 2021? a) in the statement of profit or loss? b) in the statement of financial position?

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 5PA: The following selected accounts and their current balances appear in the ledger of Clairemont Co....

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