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KengaRu [80]
3 years ago
11

Aurora Corporation operated without insurance coverage for the first month of operations. Then, on February 1, the company paid

the $4,800 premium on a two-year insurance policy with benefits beginning on that date. The company uses the accrual basis. How much insurance expense will be reported on the company's income statement for their first year ended December 31?a. $200 b. $2,200 c. $4.600 d. $4,800
Business
1 answer:
irina1246 [14]3 years ago
5 0

Answer:

Answer:

Correct answer is letter B, $2,200

Explanation:

Using accrual basis method, revenue and expenses will be recognized when incurred whether paid (expenses) nor collected (revenues).

The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)

$4,800 divided by 24 months = $200 insurance per month multiply by 11 months expired portion (February 1 to December 31) = $2,200.

An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.

($4,800 / 24 months = $200 x 11 months = $2,200)

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labwork [276]

Answer:

$20,900 times the present value of a 5-year, 11% ordinary annuity of 1’

Explanation:

For computing the required initial investment we considered the following information

Withdrawn amount = $20,900

Time period = 5 years

Rate of interest = 11%

in mathematically,

= Withdrawn amount  × Present  value of a 5-year, 11% ordinary annuity of 1’

By this formula we can get the required initial investment

4 0
3 years ago
After Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy.
aleksandr82 [10.1K]

Answer: should be protected due to the fact that their account is insured by FDIC.

Explanation:

From the question, we are informed that after Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy but that the Bigbux was an FDIC member bank.

Based on the above scenario, Xavier and Alyssa should be protected due to the fact that their account is insured by FDIC. Since the bank is insured, their money is safe.

4 0
3 years ago
Read 2 more answers
A cash payment received from a customer for a product purchased on account would be recorded as...
photoshop1234 [79]
A cash payment received from a customer for a product purchased on account would be recorded as DEBIT TO CASH AND CREDIT TO ACCOUNT RECEIVABLE.  Cash is debited because cash has been received by the company and it has to be debited to the asset account of cash. The account receivable is credited to record the fact that money has been received. 
8 0
3 years ago
In a _____ situation, the buying center is likely to proceed through all six steps in the buying process and involve many people
Masteriza [31]
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A new buy situation occurs when the customer buys goods or service for the first time. Because of this, the buying decision is quite involved to the extent of going through the six steps of the buying process.
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3 years ago
The 12-month period a business chooses for its accounting period is a/an A. calendar year. B. accounting period. C. fiscal year.
lilavasa [31]
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According to these definitions,
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7 0
3 years ago
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