Question

At December 31, 2017, before any year-end adjustments, Janus Company's Prepaid Insurance account had a balance of $2,800. It was determined that $1,200 of the Prepaid Insurance had expired. Which of the following is the correct adjusted balance for Prepaid Insurance at December 31, 2017?
a. $1,200.
b. $2,700.
c. $1,900.
d. $1,500.

Answer 1

Answer:

$1,600

Explanation:

Calculation for the adjusted balance for Prepaid Insurance at December 31, 2017

Based on the information given we were told that the company Prepaid Insurance account had a balance of the amount of $2,800 in which the of $1,200 of the Prepaid Insurance had expired this means that the correct adjusted balance for Prepaid Insurance at December 2017 will be calculated as:

Prepaid Insurance balance $2,800

Less Expired Prepaid insurance $1,200

Adjusted balance of prepaid insurance$1,600

Therefore the correct adjusted balance for Prepaid Insurance at December 2017 will be $1,600