Expense for oil ( video below)

At 31 March 20X4 a company had oil in hand to be used for heating costing $2,050 and an unpaid heating oil bill for $900.

At 31 March 20X5 the heating oil in hand was $2,325 and there was an outstanding heating oil bill of $800 .

Payments made for heating oil during the year ended 31 March 20X5 totaled $8,650

Based on these figures, what amount should appear in the company’s statement of profit or loss and other comprehensive income for heating oil for the year?

Answer

Used Oil = opening oil + purchase – ending oil

Closing accrual for oil = opening accrual + purchase – payment

Purchase = Closing accrual for oil + payment – opening accrual

= 800 + 8,650 – 900= 8,550

So used oil = $2,050 +8,550 – 2,325= 8,275

Note: if you cannot see any videos above, please click this link @ https://youtu.be/Rnq2g-V97bE