unsure questions on exam

[monokekie]

why isn't it 8000 for rent expense as its for 6 months? and this is a 6 month's trial balance?

[nbalakers24]

overtstates cost of sales, understates net profit?

thats what i wrote.

what did people do for the balance day adjustment with the rent .. last question

$4000 as he paid in january for 3 months early, so rent will be for april may june

wouldnt it be $8000? Jan-june

[Flaming_Arrow]

overtstates cost of sales, understates net profit?

thats what i wrote.

what did people do for the balance day adjustment with the rent .. last question

$4000 as he paid in january for 3 months early, so rent will be for april may june

wouldnt it be $8000? Jan-june

i'm not really sure but he pays 3 months in advance, not for 3 months, since he paid in january it will start at march

[monokekie]

haiz. so tricky.

i wonder what would be this year's cut off. anyone has any idea?

[nbalakers24]

hopefully really low?

[monokekie]

rofl what sort of question was that.

excuse my fussiness... haha

[sophx]

its usually around 78/90 isn't it
i would say it would be around that or lower.

[MiCCAS]

Mm.. did better than expected, shitty kids were annoying me all morning who came to our study group (4 people) and mucked around.. apart from that, went in and did my best so we shall see

[GoodGuys]

overtstates cost of sales, understates net profit?

thats what i wrote.

what did people do for the balance day adjustment with the rent .. last question

$4000 as he paid in january for 3 months early, so rent will be for april may june

omg i had 1 minute remaining and i jst chucked in 4000...
I love you flaming if ur right!!!

[monokekie]

its usually around 78/90 isn't it
i would say it would be around that or lower.

i hope you are psychic i really do..

[rlobo1]

i think the rent expense was 6,000 for the overall 6 month period because it said that they pre-paid rent in Jan then March then June meaning the payment in Jan started in April and covered April and May and then the payment in march was to cover June and July and so forth. That being said I wrote $4000....:S can anyone definitely say!?

[Flaming_Arrow]

i think the rent expense was 6,000 for the overall 6 month period because it said that they pre-paid rent in Jan then March then June meaning the payment in Jan started in April and covered April and May and then the payment in march was to cover June and July and so forth. That being said I wrote $4000....:S can anyone definitely say!?

it cant be  6000, each month the rent was 4000/3 which means 6000 is not possible to get

[nbalakers24]

12000/9=1333.3 X 6 = $8000

[monokekie]

ohh 3 months 4000, 6 months 8000..

[rlobo1]

well this is my logical justification lol but by no means is correct....
The business commenced on Jan and made a payment of rent then of $4000. The next payment was in March of 4000. Therefore, the BDA for rent expense must be $6000 because the Jan is 3 months in advance of april and march is 3 months in advance of Jun thus meaning each month was $2000. seeing as they commenced and only prepaid rent 3 months in advance on Jan, the rent expense for Jan Feb and March was just paid each month with the prepaid kicking in at April. 4000/2 = 2000 per month...:S