A company reported the following information: $\begin{array}{ll}
\text {Prepaid insurance, December 31, 2014 } &\$ 14,000 \
\text { Prepaid insurance, December 31, 2013 } &11,500 \
\text { Insurance expense for 2014 } &25,200
\end{array}$ How much cash was paid for insurance during 2014?
A)$22,700
B)$27,700
C)$39,200
D)$36,700

Question

A company reported the following information: $\begin{array}{ll}
 \text {Prepaid insurance, December 31, 2014   } &\$ 14,000 \
 \text { Prepaid insurance, December 31, 2013  } &11,500 \
 \text {  Insurance expense for 2014 } &25,200
\end{array}$ How much cash was paid for insurance during 2014?
A)$22,700
B)$27,700
C)$39,200
D)$36,700

Quizplus · Accepted Answer

To find the cash paid for insurance in 2014, we need to subtract the prepaid insurance at the end of the year 2014 from the total insurance expense for the year 2014 and add the prepaid insurance at the end of the year 2013.

Cash paid for insurance in 2014 = Insurance expense for 2014 - Prepaid insurance, December 31, 2014 + Prepaid insurance, December 31, 2013

= $25,200 - $14,000 + $11,500

= $22,700

Therefore, the answer is B, $27,700.

A Company Reported the Following Information How Much Cash Was Paid for Insurance During 2014? A)$22,700

A Company Reported the Following Information How Much Cash Was Paid for Insurance During 2014?
A)$22,700