Electricity bills amounting to €4,500 were paid by Edinburgh Ltd during the year ended 31 December 20X7. All of these bills relate to the year ended 31 December 20X7. A bill of

:1,500 was received in February 20X8 and covers the period from 1 November 20X7 to 31 January 20X8.
What is the amount of electricity expense which should be charged in the income statement for the year ended 31 December 20X7?
What figure would appear in the balance sheet at 31 December 20X7 relating to electricity, and under what heading?

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Cash Rent account 1,500 Income statement 1,750 Telephone account Cash 800 Income statement 880 Accruals Accruals carried down 250 1,750 carried down 80 1,750 880 880 Accruals brought down Accruals 250 brought down 80 Property taxes account Insurance account Cash 1,000 Prepayment Cash 500 Prepayment carried down 100 carried down 150 Income statement 900 Income statement 350 1,000 1,000 500 500 Prepayment brought down 100 Prepayment brought down 150 Income statement Rent 1,750 Gross profit X, XXX Property tax 900 Telephone 880 Insurance 350 Figure A.15 The rent account (next year) Rent account Cash 500 Accruals b/d 250