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Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:
- a)Rs. 1,200.
- b)Rs. 1,600.
- c)Rs. 1,300.
- d)Rs. 1,500.
Correct answer is option 'C'. Can you explain this answer?
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Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs...
Calculation of Rent Payable in Profit and Loss Account:
Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200
Rent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600
Rent for the year to 30 September, 2005 = Rs. 1,200
Rent for the year to 30 September, 2006 = Rs. 1,600
Total rent for 15 months (1 October, 2004 to 31 December, 2005) = Rs. 1,500 ((1,200/12)*15)
Therefore, the rent payable in the profit and loss account for the year ended 31 December, 2005 would be Rs. 1,300 (1,500 - 200).
Explanation:
Rent paid in advance is a prepaid expense, which means it is an expense that has been paid in advance and will be recognized as an expense in the future period(s) to which it relates. In this case, the rent paid on 1 October, 2004, relates to the year ending 30 September, 2005. Similarly, the rent paid on 1 October, 2005, relates to the year ending 30 September, 2006.
As per the accrual accounting principle, expenses should be recognized in the period to which they relate, regardless of when they are paid. Therefore, we need to adjust the rent paid in advance to reflect the portion of the rent that relates to the current period (i.e., the year ended 31 December, 2005).
To calculate the rent payable in the profit and loss account for the year ended 31 December, 2005, we need to subtract the portion of the rent paid in advance that relates to the period before 1 January, 2005 (i.e., the first three months of the year ending 30 September, 2005). This portion of the rent has already been recognized as an expense in the previous accounting period (i.e., the year ended 31 December, 2004).
Therefore, the rent payable in the profit and loss account for the year ended 31 December, 2005 would be Rs. 1,300 (1,500 - 200).
Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200
Rent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600
Rent for the year to 30 September, 2005 = Rs. 1,200
Rent for the year to 30 September, 2006 = Rs. 1,600
Total rent for 15 months (1 October, 2004 to 31 December, 2005) = Rs. 1,500 ((1,200/12)*15)
Therefore, the rent payable in the profit and loss account for the year ended 31 December, 2005 would be Rs. 1,300 (1,500 - 200).
Explanation:
Rent paid in advance is a prepaid expense, which means it is an expense that has been paid in advance and will be recognized as an expense in the future period(s) to which it relates. In this case, the rent paid on 1 October, 2004, relates to the year ending 30 September, 2005. Similarly, the rent paid on 1 October, 2005, relates to the year ending 30 September, 2006.
As per the accrual accounting principle, expenses should be recognized in the period to which they relate, regardless of when they are paid. Therefore, we need to adjust the rent paid in advance to reflect the portion of the rent that relates to the current period (i.e., the year ended 31 December, 2005).
To calculate the rent payable in the profit and loss account for the year ended 31 December, 2005, we need to subtract the portion of the rent paid in advance that relates to the period before 1 January, 2005 (i.e., the first three months of the year ending 30 September, 2005). This portion of the rent has already been recognized as an expense in the previous accounting period (i.e., the year ended 31 December, 2004).
Therefore, the rent payable in the profit and loss account for the year ended 31 December, 2005 would be Rs. 1,300 (1,500 - 200).
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Community Answer
Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs...
Rent upt0 30 sep. 2005 =. 1200/12 *9=900
As it is paid for a year
Similarly
Rent upto 31 dec 05 =1600/12*3 =400
Total rent =1300
As it is paid for a year
Similarly
Rent upto 31 dec 05 =1600/12*3 =400
Total rent =1300
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Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer?
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Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer?.
Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice Rent paid on 1 October, 2004 for the year to 30 September, 2005 was Rs. 1,200 andrent paid on 1 October, 2005 for the year to 30 September, 2006 was Rs. 1,600. Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be:a)Rs. 1,200.b)Rs. 1,600.c)Rs. 1,300.d)Rs. 1,500.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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