Answer to Question #197079 in Economics for Millicent

Question

A business earns income by renting out properties. During the year ended 31 December 2010 it received R38 400 as rent. This amount includes R5 400 received as advance for 2011. During 2011 it received R34.500 as rent and a third of this amount relates to 20x6. The financial statements for the year ended 31 December 2010 should report_______                       

Select one:

a. Rent income: R49 900;         Rent in arrears: R11 500

b. Rent income: R38 400;         Rent in arrears: None

c. Rent income: R49 900;         Rent in arrears: R11 500

d. Rent income: R44 500;         Rent in arrears: R11 500

Answer 1

The financial statements for the year ended 31 December 2010 should report: Rent income: R38 400; Rent in arrears: None.

So, the correct answer is b.