White Ltd commenced trading on 1 July Year 3 and draws up its accounts for the year ended 30 June Year 4. During its first year of trading the company pays total telephone expenses of £3,500. The three-month bill paid in May Year 4 includes calls of £800 for the quarter up to 30 April Year 4 and advance rental of £660 to 31 July Year 4. The bill received in August Year 4 includes calls of £900 for the quarter up to 31 July Year 4 and advance rental of £660 to 31 October Year 4.
Required
Show calculations of the telephone expense to be recorded in the profit and loss account of White Ltd for its first year of trading?