Paolo pays his annual rates bill by 10 monthly instalments starting on 1 April each year. He pays £450 a month from 1 April 2018 to 1 January 2019. From 1 April 2019 he pays £500 a month for the ten payments ending on 1 January 2020. What amount should Paolo charge in his statement of profit or loss for his rates expense for the financial year ended 30 September 2019?

Question

Quizplus · Accepted Answer

Paolo's rates expense for the financial year ended 30 September 2019 includes 6 months of £450 payments (April to September 2018) and 4 months of £500 payments (April to September 2019), totaling £4,750.

Paolo Pays His Annual Rates Bill by 10 Monthly Instalments