In its annual report 1999, Roche, the Swiss pharmaceuticals company provides for the following information relating...

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Finance

In its annual report 1999, Roche, the Swiss pharmaceuticalscompany provides for the following information relating to thebalance sheet item ‘other current assets’: Other current assets (inmillions of Swiss francs): 1999 1998 Accrued interest income 127 54Prepaid expenses 1,122 536 (…) Total other current assets 2,6331,469 Required Explain what the ‘accrued interest income’represents. Illustrate your explanation showing with your ownfigures the impact of the adjusting entry on the financialstatements. Explain what the ‘prepaid expenses’ represent. Provideexamples of prepaid expenses a company such as Roche could havereported. Illustrate your explanation showing, with your ownfigures, the impact of the adjusting entries on the financialstatements.

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An accured interest income is the part of the interest that has been earned by Roche over the period but has not been paid for by the bank or the firm in which Roche has parked its money Roche could have invested a part of its cash surplus in a fixed deposit in a bank for a maturity period See Answer

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