VCAA 2008 Q2.2.2

[naved_s9994]

I get the particulars, and dates right. So according to the Assesment report, I get 3/4 Marks for this question.
Im not getting the actual amount correct.

Can anyone actually calculate the amount, thanks

Average Mark 1.4/4

[Buharrr]

ok, firstly we have to take into account that $4720 remains in the prepaid insurance account. Therefore we subtract 3600 that he paid to renew from the 4720 and we get 1120. this is the expense for the previous annual insurance. then we have to divide 3600 by 12 and the multiply by 8 for the months from nov 2007 to june 30 2008. this gives us 2400

add 2400 and 1120 and you get 3520 which is the adjustment

i hope this makes sense 

[naved_s9994]

ok, firstly we have to take into account that $4720 remains in the prepaid insurance account. Therefore we subtract 3600 that he paid to renew from the 4720 and we get 1120. this is the expense for the previous annual insurance. then we have to divide 3600 by 12 and the multiply by 8 for the months from nov 2007 to june 30 2008. this gives us 2400

add 2400 and 1120 and you get 3520 which is the adjustment

i hope this makes sense 

Answer, is correct...but substracting the 3600 from 4720 doesnt make any sense to me

Look


   Im using abbreviates people...dont do it in exam though !

      PIA
___________

Bal 4720   | Prepaid Ins Exp
Bank 3600 | Balance

The Payment, on the debit side of PIA?!

[Buharrr]

well since the balance is 4720 this is what would be the debit balance of PIA.

therefore in order to see how much was remaining for the period june 30 2007 to oct 31 2007 we have to do this subtraction to get 1120. this is the amount that represents the benefit of that period june 30 07 to oct 31 08 and thus has been consumed and therefore be allocated as an expense.

[naved_s9994]

well since the balance is 4720 this is what would be the debit balance of PIA.

therefore in order to see how much was remaining for the period june 30 2007 to oct 31 2007 we have to do this subtraction to get 1120. this is the amount that represents the benefit of that period june 30 07 to oct 31 08 and thus has been consumed and therefore be allocated as an expense.

Okay yep got that.
THanks man