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During 2004, B, a limited liability company, paid a total of $60,000 for rent, covering the period from 1 October
2003 to 31 March 2005.


What figures should appear in the company’s financial statements for the year ended 31 December 2004?


                   Income statement                                     Balance sheet
A                       $40,000                                        Prepayment $10,000
B                       $40,000                                        repayment $15,000
C                       $50,000                                               Accrual $10,000
D                       $50,000                                               Accrual $15,000

A

 Income statement 12/18 x 60,000 = 40,000
Prepayment 3/12 x 40,000 = 10,000

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