Accruals and Prepayments

Accruals and Prepayments of Income

Revision

1) You work as an accounts assistant for Snazzy Magazine, a subscription only publication in South Wales. You have been given the following information relating to the year to 31st December 2010:

Subscriptions paid into the bank account of Snazzy Magazine during 2010 - £4,800. This figure includes subscriptions of £1,200 for 2011.

You are to provide the T account which clearly shows the amount transferred to the Income Statement and the balance carried down into 2011.

Subscriptions Received | | | | | | | | | | | | | | | |

2) You have been asked by Shania to help her complete the year end account for her rental income. Shania has given you the following information:

Rents outstanding as at 1st January 2010 £500
Rents received during 2010 £6,500
Rents owed at the end of the year £700

Shania has asked you to tell her how much she should include for rental income in her Income Statement for the year ending 31st December 2010.

Rental Income | | | | | | | | | | | | | | | | | | | |

3) Jones and Son, a small minibus operator, have asked you to complete some work for them in relation to the income they receive from a local care home. The home uses the services of Jones and Son to transport their patients to and from hospital. This service has been running for 3 years. Rather than charge ‘per trip’, Jones and Son set a monthly fee of £2,400 for this service (ignore VAT) which is due to be paid quarterly in advance on the following dates:

1st February
1st May
1st August
1st November

Jones and Son have a financial year end of 30th September.

The care home failed to make the payment on 1st August as there had been a fire and it was agreed that this charge would be added to the November payment.

Write up the T-account below to show the receipts for the year and clearly state the figure to be included in the income Statement.

Note: You do not need to use any other T-Accounts in your answer

Transportation Income Date | Narrative | £ | Date | Narrative | £ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |