2020 BGSS 3E POA EOY P2 Q3

3 Best Price Trading’s financial year ends on 30 June. The owner of the business provided the following balances.

 

1 July 2019

30 June 2020

 

$

$

Insurance expense payable

1 500

 

Prepaid insurance

 

2 300

Rental income receivable

2 500

5 000

An extract from the cash book for the year is provided below.

Payment by cheque:

$

Insurance expense

9 800

  

Receipt by cheque:

$

Rental income

27 500

REQUIRED

a. Prepare the journal entries to record transactions related to insurance expense. Closing entries are not required. Narration is not required.

[8]

b. Calculate the rental income earned for the year ended 30 June 2020.

[2]

c. Prepare an extract of the statement of financial performance for the year ended 30 June 2020.

[2]

d. Prepare an extract of the statement of financial position as at 30 June 2020.

[2]

[TOTAL 14]

SOLUTION
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a)
b)

Rental income earned = -2500 + 27500 + 5000

= $30 000

c)
d)

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