Question 1: Sawyer Ltd

1. Sawyer Ltd has a year-end of December 31^st. On August 31^st, 2020, it paid (in cash) $30,000 of rent for the six months ending on February 28^th, 2021. What amount should appear in the 2020 income statement? What amount should appear on the closing balance sheet for 2020? Record these transactions in a transaction worksheet.

1. Now suppose that the next two semi-annual rent payments are:

February 28^th, 2021 $36,000

August 31^st, 2021 $42,000

What amount should appear in the 2021 income statement? What amount should appear on the closing balance sheet for 2021? Record these transactions in a transaction worksheet.

Question 2: Austen Ltd

On December 31^st, 2020, Austen Ltd (which has a December 31^st year-end) received and paid a telephone bill of $18,000 comprising:

Calls for the three months ended on December 31^st, 2020 $14,000

Line rental for the six months ending on March 31^st, 2021 $4,000

What amounts should appear in the 2020 income statement and on the closing 2020 balance sheet in respect of this bill? Record these transactions in a transaction worksheet.