The trainee accountant at Judd Co has forgotten to make an accrual for rent for December in thefinancial statements for the year ended 31 December 20X2. Rent is charged in arrears at the end of February, May, August and November each year. The bill payable in February is expected to be $30,000. Judd Co’s draft statement of profit or loss shows a profit of $25,000 and draft statement of financial position shows net assets of $275,000. What is the profit or loss for the year and what is the net asset position after the accrual has been included in the financial statements? Profit for the year Net asset position
A、$15,000 $265,000
B、$15,000 $285,000
C、$35,000 $265,000
D、$35,000 $285,000
A、$15,000 $265,000
B、$15,000 $285,000
C、$35,000 $265,000
D、$35,000 $285,000
【参考答案及解析】
An accrual should be made for $10,000 ($30,000/3 months). The double entry to record the accrual in the accounts is： Dr Expenses (SPL) $10,000 Cr Accruals (SOFP) $10,000 This reduces profit from $25,000 to $15,000 An accrual is a liability and so will reduce the net asset position, from $275 ,000 to$265,000 Remember that net assets = assets - liabilities
An accrual should be made for $10,000 ($30,000/3 months). The double entry to record the accrual in the accounts is： Dr Expenses (SPL) $10,000 Cr Accruals (SOFP) $10,000 This reduces profit from $25,000 to $15,000 An accrual is a liability and so will reduce the net asset position, from $275 ,000 to$265,000 Remember that net assets = assets - liabilities