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what is the difference in the proration amount for a $1000 item if closing is on june 6 using the 365 day vs. the 12-month/30-day method of calculation? there are 156 days between january 1 and june 6, including june 6.

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None of the options above is correct. In corporate accounting, proration  can refer to the logical allocation of overutilized and underutilized resources that a company must balance its books at the end of an accounting period.

What does prorated amount mean?

  • Proration sounds complicated, but it's actually a very simple concept. Basically, if you use something for less time than planned, you can expect to be charged only for the time you use. This basically means a prorated fee or amount.
  • Proportional pay is when an employee must be paid equal to the number of days worked.

How is the prorated amount calculated?

The amount payable to each shareholder corresponds to its proportionate share. It is calculated by dividing each person's ownership interest by the total number of shares and multiplying the resulting fraction by the total amount of dividends.

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