During the year ended 31 December 2016 a company paid a tota

During the year ended 31 December 2016, a company paid a total of £60,000 for rent,
covering the 18 month period from 1 October 2015 to 31 March 2017. What figures should
appear in the financial statements of the company for the year ended 31 December 2016?

Solution

The figure that should appear in the financial statements of the company for the year ended 31 December 2016 is the amount of rent expired as on 31 December 2016 i.e. $ 10,000 . The United states financial year runs from October 1 through September 30. Till September 30 , 2016 rent expired equals $ 40,000 .

From october 1 2016 till December 31 2016 , rent expired equals $ 10,000 .