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Balance Sheet Prepaid Insurance Accrual Basis December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 $ 14.375 7475 575 00 Cash Basis 0 Year 1 Year 2 Year 3 Year 4 Total Income Statement Insurance Expense $ $ Accrual Basis 6,325 6,900 6,900 575 20,700 Cash Basis $ 20,700 0 00 $ 20,700

Balance Sheet Prepaid Insurance Accrual Basis December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 $ 14.375 7475 575 00 Cash Basis 0 Year 1 Year 2 Year 3 Year 4 Total Income Statement Insurance Expense $ $ Accrual Basis 6,325 6,900 6,900 575 20,700 Cash Basis $ 20,700 0 00 $ 20,700

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 1, Year 1, a company paid an $20,700 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table. Balance Sheet Prepaid Insurance Accrual Basis December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 s Answer is complete but not entirely correct. Income Statement Insurance Expense 14.375 7475 575 0 000 S Cash Basis 0 0 0 0 Year 1 Year 2 Year 3 Year 4 Total $ $ Accrual Basis 6,325 6,900✔ 6,900✔ 575 X 20,700 Cash Basis $ 20,700 00 00 00 $ 20,700
Transcribed Image Text:On December 1, Year 1, a company paid an $20,700 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table. Balance Sheet Prepaid Insurance Accrual Basis December 31, Year 1 December 31, Year 2 December 31, Year 3 December 31, Year 4 s Answer is complete but not entirely correct. Income Statement Insurance Expense 14.375 7475 575 0 000 S Cash Basis 0 0 0 0 Year 1 Year 2 Year 3 Year 4 Total $ $ Accrual Basis 6,325 6,900✔ 6,900✔ 575 X 20,700 Cash Basis $ 20,700 00 00 00 $ 20,700
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