Fink Insurance collected premiums of $18,000,000 from its customers during the current year. The adjusted balance in the Unearned premiums account increased from $6 million to $8 million dollars during the year. What was Fink's revenues from earned insurance premiums for the current year?
A)$10,000,000.
B)$16,000,000.
C)$18,000,000.
D)$20,000,000.

Question

Quizplus · Accepted Answer

To calculate the earned insurance premiums, we need to take the amount of premiums collected during the year and deduct any unearned premiums at the end of the year. Therefore, the earned insurance premiums for the current year would be $18 million (premiums collected) minus $8 million (adjusted balance in unearned premiums at the end of the year) minus $6 million (adjusted balance in unearned premiums at the beginning of the year) which equals $4 million. Therefore, Fink's revenue from earned insurance premiums for the current year was $16,000,000 (earned premiums multiplied by policy count).

Fink Insurance Collected Premiums of $18,000,000 from Its Customers During