4.8 LO2/5 From the information given below, you are required to show the ‘Rent and insurance’ account for the business for the year ended 30 June 2017, indicating clearly the prepayments and accruals at that date and the transfer to the profit and loss account for the year.

The balance on the account at 1 July 2016 showed:

Rent accrued $2,000 Insurance prepaid $2,000 Payments made during the year to 30 June 2017 were as follows:

10 August 2016 Three months’ rent to 31 July $3,000 15 October 2016 One year’s insurance to 31 October 2017 $6,000 1 December 2016 Three months’ rent to 31 October 2016 $3,000 15 January 2017 Four months’ rent to 28 February 2017 $4,400 28 February 2017 Six months’ rent to 31 August 2017 $6,600 4.9 LO2/3/5 From the following information, show the ledger accounts for receivables, bad debts, provision for doubtful debts, and relevant sections of the profit and loss for 2016 and 2017.
1 January 2016 Receivables $400,000 Provision for doubtful debts $8,000 2016 Sales $2,210,000 Cash received $1,900,000 Sales returns $50,000 Bad debts $10,000 2017 Sales $2,515,000 Cash received $2,600,000 (including a bad debt recovered of $2,000)
Sales returns $40,000 Bad debts $9,000 The provision for doubtful debts is to be maintained at 2% of debtors/receivables.
INTERMEDIATE