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PREPAYMENTS

  • Affiliate PM.Dip
  • 51 posts
  • # 115068

Hi everyone

I really can not get my head around Prepayments

I am hoping someone can help me because I know the correct answer but can not get to the figures:-

My company is VAT registered and the year end is 30th  Sept

I pay for a software licence for a year at a time and last paid on 31st Dec at a net cost of £2700, the balance on this account is currently £5380, what will the cost of the software licence be charged to the profit & loos account for the year.

Any help would be much appreciated in a simple format please - thank you

Stressed Mandy

  • Affiliate
  • 7 posts
  • # 116824

Mandy1975 said:

Hi everyone

I really can not get my head around Prepayments

I am hoping someone can help me because I know the correct answer but can not get to the figures:-

My company is VAT registered and the year end is 30th  Sept

I pay for a software licence for a year at a time and last paid on 31st Dec at a net cost of £2700, the balance on this account is currently £5380, what will the cost of the software licence be charged to the profit & loos account for the year.

Any help would be much appreciated in a simple format please - thank you

Stressed Mandy


 You're going to need to give us more info.  Forgetting about the VAT for a moment as you would not prepay this.  What account actually has the £5380 on it?

£2700 paid on 31/12 for the following 12 months would be fully prepaid on 31/12 and released at a rate of £225 per month.  Where has the £5380 come from? 

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