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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Black Ltd commenced trading on 1 September Year 3 and is preparing its accounts for the year ended 31 August Year 4. During its
first year of trading the company pays total telephone company invoices of £4,300. The three-month invoice paid in July Year 4
includes calls of £1,200 for the quarter up to 30 June Year 4 and advance rental of £960 for the quarter to 30 September Year 4.
The invoice received in October Year 4 includes calls of £840 for the quarter up to 30 September Year 4 and advance rental of
£1,200 for the quarter to 31 December Year 4.
What is the telephone expense to be recorded in the income statement for the first year of trading?
D
a) £5,180
b) £4,300
c) £4,860
d) £4,540
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