Whatmore College rents a photocopy machine from City Equipment Ltd agreeing to: (i) Pay an agreed rental
Question:
Whatmore College rents a photocopy machine from City Equipment Ltd agreeing to:
(i) Pay an agreed rental annually in advance on 1 January and in addition pay three pence per copy taken;
(ii) Meet the copy charges by paying £5,000 per quarter in arrears on 31 March, 30 June, 30 September and 31 December.
As at 1 May 2009 annual rental paid in advance amounted to £8,000 while copy charges owed was £1,245. As from 1 January 2010 the annual rental has been increased to £15,000. During the year ended 30 April 2010, the number of photocopies taken was 710,400. Assuming that the college maintains a single account for City Equipment, recording both rentals paid in advance and amount payables for copies taken, set out the City Equipment account for the year ended 30 April 2010.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict