Question

The income statement of Dolan Corporation for 2014 included the following items: Interest revenue $121,000 Salaries and wages expense 180,000 Insurance expense 18,200 The following balances have been excerpted from Dolan Corporation's balance sheets: December 31, 2014 December 31, 2013 Interest receivable $18,200 $15,000 Salaries and wages payable 17,800 8,400 Prepaid insurance 2,200 3,000 The cash paid for insurance premiums during 2014 was

Answer 1

Answer:

$17,400

Explanation:

Equation to be used is as follows: Beginning Prepaid Insurance Expense balance + Cash paid for insurance premium - Ending prepaid insurance balance = Insurance expense

$3,000 + Cash paid - $2,200 = $18,200

$800 + Cash paid = $18,200

Cash paid = $18,200 - $800

Cash paid = $17,400

So, the cash paid for insurance premiums during 2014 was $17,400