Question

On December 31, 2017, Coolwear, Inc. had a balance in its prepaid insurance account of $61,400. During 2018, $99,000 was paid for insurance. At the end of 2018, after adjusting entries were recorded, the balance in the prepaid insurance account was 48,500. Insurance expense for 2018 would be:

Answer 1

Answer:

$111,900

Explanation:

The computation of the Insurance expense for 2018 would be

= Opening Balance in prepaid insurance for the year 2018 + insurance paid - ending balance in prepaid insurance account

= $61,400 + $99,000 - $48,500

= $111,900

To find out the insurance expense basically we added the insurance paid and deduct the ending balance of prepaid insurance to the opening balance of prepaid insurance