Question

Mau peseysund and 1962351 27 depreciation on the windows sent in December 2013. sh first fent that same partners to arena Tancastro Y Question 47 of 75. rented begin for January and seven months. Glenn has a rental house that was rented beginning January 1 in the current tax year. On January 1, the tenant paid Glenn a $1,200 security deposit plus $950 rent for January and $950 rent for the last month, whenever that occurs. The tenant timely paid the $950 monthly rent each of the remaining eleven months. How much rental income will Glenn report for the current year? O $11,400 O $12,350 O $12,600 $13,550 Mark for follow up

Answer 1

Ans : Glenn has to report $ 11400 (12*950) as his rental income for Current year.

Explanations : on 1st Jan tenant paid $ 1200 to Glenn as security deposit which cannot be recognized as his income

Security Deposit will be recognized in balance sheet in current liabilities as it has to be refunded to the tenant in the future.

on the same day (1st Jan) Tenant also paid $ 950 towards January month rent which has to be recognized as current year revenue.

$ 950 towards previous month rent which means it is related December month of previous year.

therefore this $ 950 is already shown in Previous year December month by creating Below accrual entry

Rent Receivable Account (Balance sheet account) Dr

Rent Account(P&L Account)                                        Cr

So the December month rent received in the month of January will hit to to Balance sheet account against to the accrual created in last month.

and it is clearly mentioned that the remaining 11 months rent paid on time.

So the rent to be recognized in current year is $ 950 *12 Months =11400

Hence which cannot recognize this in Current year.This Value will go the balance sheet