2020 SMSS 3E POA EOY P2 Q3
3 Leonard runs a tuition centre. The financial year end of his business is 30 June. The following information has been provided.
Accounts balance at 1 July 2019
Rent income received in advance
During the year ended 30 June 2020
Payments made for advertising
1. Advertising expense, $583, had not been paid on 30 June 2020.
2. Included in the rent received was the sum of $1 300 in respect of rent due for July 2020.
a. Calculate the amounts (showing all workings) to be included in the statement of financial performance of the business for the year ended 30 June 2020 for:
i. Advertising expense
ii. Rent income
b. Prepare an extract of the financial position of the business as at 30 June 2020.
c. State and explain the accounting theory applied when calculating the amount for advertising expense for the year ended 30 June 2020.
i. Monetary theory
ii. Accounting period theory