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icang [17]
3 years ago
12

On August 1 of Year 1, a company paid $1,200 cash in exchange for an insurance policy that protects the company from loss due to

fire for a one year term. Based solely on this information, how will the December 31, Year 1 financial statements be affected
Business
1 answer:
alexandr402 [8]3 years ago
5 0

Answer:

The statement of cash flows will show $1,200 outflow from operating activities.

The balance sheet will show $700 of prepaid insurance.

The income statement will show $500 of insurance expense.

Explanation:

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