A business which prepares accounts to 31 December each year paid insurance premiums as follows:

Required:
Calculate the amount which should be shown for insurance in the profit and loss account for the years to 31 December 1998 and 1999. Also calculate the amount of any accruals or prepayments which should be included in the balance sheets as at 31 December 1997, 1998 and 1999.

Transcribed Image Text:

Date paid Amount 1 December 1997 840 2 January 1999 4 December 1999 1,020 960 Period covered year to 30 November 1998 year to 30 November 1999. year to 30 November 2000