(Accrual Accounting) What is the impact of the following prepayment, accrual, and provision transactions on profit, the statement of financial position, and the statement of cash flows?
- A business has 24 motor vehicles that it leases in return for a monthly payment, excluding insurance. The company”s financial year is April 1–March 31, but the annual insurance premium of $400 per vehicle for the calendar year January–December is due for payment on December 31.
- A business budgets for energy costs of $6,000 per annum over its financial year January 1–December 31. Bills for usage are sent each quarter on the last day of February, May, August, and November. Historically, 70% of the annual energy cost is spent during the autumn and winter (September–February).
- A business with a financial year of April 1–March 31 purchases a new computer network server for $12,000 on June 30. The business depreciates computer hardware at the rate of 20% of cost per annum, beginning the month following purchase.