Problem
On 1 January 2016 the following balances of expenses, amongst others, stood in the books of B Baxter:
• Lighting and heating (Dr) $192.
• Insurance (Dr) $1,410.
During the year ended 31 December 2016 the information related to these two accounts is as follows:
1. Fire insurance, $1,164 covering the year from 1 January 2016 to 31 May 2017 was paid.
2. General insurance, $1,464 covering the year from 1 January 2016 to 31 July 2017 was paid.
3. An insurance rebate of $82 was received on 30 June 2016.
4. Electricity bills of $1,300 were paid.
5. An electricity bill of $162 for December 2016 was unpaid as on 31 December 2016.
6. Oil bills of $810 were paid.
Task
a) What is the amount accrued for lighting and heating, and amount prepaid for insurance at the year ended 31 December 2016?
b) How much are the total expenses for lighting and heating and insurance respectively for the year ended 31 December 2016?
c) Show how the Income Statement and Statement of Financial Position as at 31 December 2016 are affected, after all adjustments have been made, from the information above.