Iago Ltd buys two motor vans costing 41,000 in total. They are depreciated on the reducing-balance basis at the rate of 40% per annum. Which of the following statements is true?

The NBV of the vans after two years will be 14,760 and the depreciation charge for year 2 will be 9,840

The NBV of the vans after two years will be 24,600 and the depreciation charge for year 2 will be 9,840

The NBV of the vans after one year will be 14,760 and the depreciation charge for year 2 will be 16,400.

The NBV of the vans after one year will be 24,600 and the depreciation charge for year 2 will be 16,400.

Mr Smith has paid 5 years rent in advance. On 1 January 2019 he paid 10,000. At the 31 December 2020 he will have:

A prepayment of 6,000

An accrual of 6,000

A prepayment of 4,000

An accrual of 4,000

A business compiling its financial statements for the year to 31 October each year pays rent of 12,000 per quarter in advance on 1 January, 1 April, 1 July and 1 October each year. The rent amount has remained the same for several years. What figure should appear in the Profit & Loss Account (Income Statement) for the year ended 31 October 2018 and in the Balance Sheet (Statement of Financial Position) at that date in respect of rent?

Dr P & L 40,000; Dr SOFP 8,000

Cr P & L 48,000; Cr SOFP 8,000

Dr P & L 40,000; Cr SOFP 8,000

Dr P & L 48,000; Cr SOFP 8,000

A business compiling its financial statements for the year to 31 March each year pays rent of 18,000 per quarter in advance on 1 February, 1 May, 1 August and 1 November each year. The rent amount has remained the same for several years. What figure should appear in the Profit & Loss Account (Income Statement) for the year ended 31 March 2021 and in the Balance Sheet (Statement of Financial Position) at that date in respect of rent?

Rent expenses 18,000; Prepaid rent 18,000

Rent expenses 18,000; Prepaid rent 6,000

Rent expenses 72,000; Prepaid rent 6,000

Rent expenses 72,000; Prepaid rent 12,000

The year end is 31 December 2018. During February 2019, a telephone bill for 4,424 (excluding VAT) was received. The bill was for line rental for the 1st February 2019 to 30th April 2019 of 1,000 (being the same amount as line rental for the previous quarter). The cost of calls from 1st November 2018 to 31st January 2019, 3,424, was also included in the bill. What would be the year-end adjustment to the telephone expense account in the P & L for the year ended 31 December 2018?

Net debit of 2,289

Net debit of 2,089

Net debit of 1,949

Net debit of 144

At 30th June 2018 a companys provision for doubtful debts was 78,000. At 30th June 2019 debtors (receivables) totalled 1,034,000. It was decided to write off debts totalling 74,000 and to adjust the provision to the equivalent of 5% of remaining debtors (receivables). What figure should appear in the income statement for bad and doubtful debts expense for the year ended 30 June 2019?

74,000

44,000

47,700

104,000

Cuddly plc's closing inventory consists of 1,000 teddy bears purchased for 10,000. Ninety of these teddy bears were damaged due to a leakage in the warehouse ceiling. If repaired at a cost of 2 each, these teddy bear could be sold for 8 each.

What amount of closing inventory should be reported in the financial statements of Cuddly plc?

9,720

10,000

9,640

720