At the start of the financial year ending 2020, a business had an opening accrual of...

 

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At the start of the financial year ending 2020, a business had an opening accrual of €1,500 for light and heat expenses. During the year the business paid light and heat expenses totalling €12,000. At the end of the financial year ending 2020, the business had a closing prepayment of €900 for light and heat. What is the light and heat expense in the Statement of Profit and Loss for the financial year ending 31 December 2020? (4 marks) Melissa has successfully managed a business in Limerick for a number of years. Due to the current pandemic, Melissa has identified a short term cashflow issue in her business. Arising from this, Melissa reviewed her trade receivables and trade payables balances. Melissa has a trade receivables balance of €80,000 and a trade payables balance of €25,000. In order to manage her cashflow, Melissa has decided to provide a 5% discount to all credit customers to encourage them to pay quicker. What journal entries are required to reflect the above discount? (a) Dr: Trade receivables: €4,000 (b) (c) (d) Dr: Discount allowed: €4,000 Dr: Discount allowed: €1,250 Dr: Trade payables: €1,250 Cr: Discount allowed: €4,000 Cr: Trade receivables: €4,000 Cr: Trade payables: €1,250 Cr: Discount received: €1,250 At the start of the financial year ending 2020, a business had an opening accrual of €1,500 for light and heat expenses. During the year the business paid light and heat expenses totalling €12,000. At the end of the financial year ending 2020, the business had a closing prepayment of €900 for light and heat. What is the light and heat expense in the Statement of Profit and Loss for the financial year ending 31 December 2020? (4 marks) Melissa has successfully managed a business in Limerick for a number of years. Due to the current pandemic, Melissa has identified a short term cashflow issue in her business. Arising from this, Melissa reviewed her trade receivables and trade payables balances. Melissa has a trade receivables balance of €80,000 and a trade payables balance of €25,000. In order to manage her cashflow, Melissa has decided to provide a 5% discount to all credit customers to encourage them to pay quicker. What journal entries are required to reflect the above discount? (a) Dr: Trade receivables: €4,000 (b) (c) (d) Dr: Discount allowed: €4,000 Dr: Discount allowed: €1,250 Dr: Trade payables: €1,250 Cr: Discount allowed: €4,000 Cr: Trade receivables: €4,000 Cr: Trade payables: €1,250 Cr: Discount received: €1,250

Answer rating: 100% (QA)

Light and Heat Expense Calculation Opening accrual 1500 Payments during the year 12000 Closing prepa... View the full answer