Whatmore College rents a photocopy machine from City Equipment Ltd agreeing to: (i) Pay an agreed rental

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Whatmore College rents a photocopy machine from City Equipment Ltd agreeing to:

(i) Pay an agreed rental annually in advance on 1 January and in addition pay three pence per copy taken;

(ii) Meet the copy charges by paying £5,000 per quarter in arrears on 31 March, 30 June, 30 September and 31 December.

As at 1 May 2009 annual rental paid in advance amounted to £8,000 while copy charges owed was £1,245. As from 1 January 2010 the annual rental has been increased to £15,000. During the year ended 30 April 2010, the number of photocopies taken was 710,400. Assuming that the college maintains a single account for City Equipment, recording both rentals paid in advance and amount payables for copies taken, set out the City Equipment account for the year ended 30 April 2010.

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Financial Accounting An Introduction

ISBN: 9780273737650

2nd Edition

Authors: Mr Barry Elliott, Mr Augustine Benedict

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