Tom Limited has a year end - 30/11/X2. The business pays for its Rent by standing order of £120 per month. The cost can vary per month depending on the sales made by Tom Limited. On 01/12/X1, the statement from the landlord showed that Tom Limited had overpaid by £40. The business received rent bills for the four quarters commencing on 01/12/X1 and ending on 30/11/X2 for £260, £280, £420 and £400.
Identify the correct entry that should appear in the income statement for Tom Limited for the year ended 30/11/X2.

Question

Quizplus · Accepted Answer

The total rent bills for the year are £260 + £280 + £420 + £400 = £1,360. The overpayment of £40 from the previous year does not affect the rent expense for the current year.

Tom Limited Has a Year End - 30/11/X2