Question 2 (b)Andrew Brown prepares accounts to 31 December eachyear. He maintains a combined Rent and Rates Account inhis ledger.At 1 January 2019 the balances on the Rent and RatesAccount were as follows.Rates prepaid(3 months to 31 March2019)€2,000Rent accrued due(2 monthsto 31December 2018)€4,000Rent is payable quarterly and rates are payable halfyearly.The following payments were made in the year ended 31December 1919.February 2019quarter to 31 January 2019May 2019year to 30 September 2019May 20191Paid rentfor1Paid rates for half2Paid rent for quarterto 30 April 201914August2019Paidrentforquarter to 31 July 201912October 2019Paid ratesforhalf year to 31 March 202011November 2019Paid rent forquarter to 31 October 2019Rates were increased by €800 per annum with effect from 1April 2019. Rent was increased by €2,400 per annum witheffect from 1 November 2019.Requirement:Draw up the Rent and Rates Account for Andrew Brown forthe year ended 31 December 2019.

Figures in € Rates Prepaid 2000 Rent Accrued 4000 Rent Paid 6000…

Answered: Rent and Rates Account

Business

Accounting

Rent and Rates Account

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter3: Basic Accounting Systems: Accrual Basis

Section: Chapter Questions

Problem 3.21E: Adjustments for unearned and accrued fees The balance in the unearned fees account, before...

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(Appendix 3.1) Cash-Basis Accounting Puntarelli Contracting keep its accounting records on a cash basis during the year. At year end, it adjusts its books to the accrual basis for preparing its financial statements. At the end of 2018, Puntarelli reported the following balance sheet items. It is now the end of 2019. The companys checkbook shows a balance of 4,700, which includes cash receipts from customers of 51,300 and cash payments of 49,300. An examination of the cash payments shows that: (1) 30,600 was paid to suppliers, (2) 12,700 was paid for other operating costs (including 7,200 paid on January 1 for 2 years annual rent), and (3) 6,000 was withdrawn by T. Puntarelli. On December 51, 2019, (1) customers owed Puntarelli Contracting 55,900, (2) Puntarelli owed suppliers and employees 7,000 and 900, respectively, and (3) the ending inventory was 6,300. Puntarelli is depreciating the equipment using straight line depreciation over a 10-year life (no residual value). Required: 1. Using accrual based accounting, prepare a 2019 income statement (show supporting calculations). 2. Using accrual-based accounting, prepare a December 31, 2019, balance sheet (show supporting calculations).