Receivables and Prepayments (video below)
At 31 December 20X4 the following matters require inclusion in a company’s financial statements:
1.On 1 January 20X4 the company made a loan of $3,000 to an employee, repayable on 31 March 20X5, charging interest at 5 per cent per year. On the due date she repaid the loan and paid the whole of the interest due on the loan to that date.
2.The company has paid insurance $2,250 in 20X4, covering the year ending 31 August 20X5.
3.In January 20X5 the company received rent from a tenant $1,000 covering the six months to 31 December 20X4.
For these items, what total figures should be included in the company’s statement of financial position at 31 December 20X4?
Answer
| $ | |
| Receivables and prepayments | |
| Insurance 2,250 x 8/12 prepayment | 1,500 |
| Loan (receivable) | 3,000 |
| Interest due 3,000 x 5% (receivable) | 150 |
| Rent due (receivable) | 1,000 |
| 5,650 |
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