[Bruceandginna]

The correct answer to this seems to be confusing due to timing of rent and allowance. Does someone have a clear way to solve this problem and make the answer clear?

This is a question regarding rent and allowance provided a college student by his parents:

In March, a young man moves out of his dorm room and into an apartment on March 20.
The apartment rent is $800 per month. His allowance is $400 per month. The $400 was paid for the month of March and the first half of the month of march is not in question regarding rent. The terms of the rent is 15th to 15th.

On April 1st, the parents provide $400 allowance and then pay the rent of $800 (April 15 to May 15) on April 15th.

On May 1st, the parents increase the allowance to $1700 and tell the student that the rent will be paid from the allowance. On May 15th, the rent is paid of $800 (to cover from May 15 to June 15).

Near the end of May, the student is forced to leave the apartment and move to another location (in this case a friend's couch - which is free) as of June 1st. The landlord refunds the unused portion of the rent of $400 because the student will not be in the apartment after June 1st.

When June 1st roles around, the student wants his allowance of $1700.

Does the student receive the $1700 allowance PLUS the $400 refund? That would mean that the $400 was part of the May allowance/rent. Or is the refund NOT returned to the student... rather it is returned to the parents as a refund of unused June rent.

The student in this case feels that the rent paid on May 15th of $800 was taken from his $1700 giving him $900 for the month of May. So when $400 is refunded, that was money spent against his May allowance/rent. He feels that the $400 refund (spent in May) should be returned to him in ADDITION to the $1700 for the June rent/allowance

The parents feel that the rent was $800 for the month of May and the student received $900 which totals $1700. The $400 that was refunded was refunded from the never-used portion of June and therefore should count against the June allowance/rent. The parents feel that the refund of $400 should come to the parents and the student should receive the June allowance of $1700 WITHOUT the additional $400 form the refund.

Please don't misunderstand the situation. All parties understand that the allowance is a gift from the parents. This is simply an effort to understand the math and accounting transaction that occurs here.

[Wondergirl]

All monies belong to the parents. Are they also paying tuition?

[ScottGem]

The parents should pay the student $500 for June. Since he is no longer paying rent, then the allowance should be reduced to $900 ($1700-$800). Since the student received a refund of $400, that should be applied towards the $900, leaving a balance $500.

I'm assuming this is a home work question, for an accounting course, though it sounds weird. Its also unrealistic since I don't know of any landlord that would just refund an overpayment if a tenant had to leave suddenly.

By the way, the student is a greedy ingrate.

[Bruceandginna]

Thanks Scott and Wondergirl. The question was not about the appreciation of the student. All agree as to who owns the money. The question came up because the rotation of the rent and the allowance being off. The student thought the 400 from June was paid in May and therefore would belong to the May "income" (allowance). To the parents, it was a simple issue of showing total rent paid in each month ($800) deducted fro the total "income" (allowance). In either case, what happens to the refund of $400? Applied to May since it was paid in May? Or applied to June because it would be used in June?
Thanks for your help... and your comment :)

[ScottGem]

Like I said, applied towards or simply returned to the parents. Either way the student gets a total of $900 for June

[Cat1864]

I agree with Scott's assessment. I will say I thought it sounded like an accounting homework question then further thought brought up a sublet scenario that fell through as a possibility. I notice that there is no mention of security or other deposits.

It seems to me, the parents gave him an allowance plus the rent. The monies may have been given to him in one sum, but they were separate accounts. The parents used him as an agent to pay the rent. The rent money was never his. This would mean the refund is not his. It goes back to the parents.

For June, the parents should pay only the allowance. There is no rent to be paid. They can allow him to collect the refund and add $500 to meet the $900 or they can collect the refund and give the student $900. Or they can reduce the amount of allowance back to $400 since he no longer has his own place to keep up. Let him keep the refund and call it even.

Another thought occurs. How long will he be sleeping on the friend's couch?

The $400 could be paid to the friend for supplying a roof, couch and other amenities to the student. Sleeping on the couch may be free to the student, but it won't be for the friend.