KOM pays the following insurance premiums during 2020:Auto accident and liability insurance: Paid 1/1/20 Coverage period 1/1/20—12/31/20$3,500Fire, storm, and other casualty insurance: Paid 4/1/20 Coverage period 4/1/20–3/31/22$5,000Business liability insurance (a material amount for the company): Paid 5/1/20 Coverage period 5/1/20–4/30/21$3,000Complete the statement below. Do not round intermediate calculations.a. If KOM uses the accrual method of accounting, the insurance expense deduction for 2020 is b. If KOM uses the cash method of accounting, the insurance expense deduction for 2020 is

Accounting refers to the process of documenting all the financial transactions of a company in its…

Answered: Paid 1/1/20 Coverage period…

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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KOM pays the following insurance premiums during 2020:

Auto accident and liability insurance:
	Paid 1/1/20 Coverage period 1/1/20—12/31/20	$3,500
Fire, storm, and other casualty insurance:
	Paid 4/1/20 Coverage period 4/1/20–3/31/22	$5,000
Business liability insurance (a material amount for the company):
	Paid 5/1/20 Coverage period 5/1/20–4/30/21	$3,000

Complete the statement below. Do not round intermediate calculations.

a. If KOM uses the accrual method of accounting, the insurance expense deduction for 2020 is

b. If KOM uses the cash method of accounting, the insurance expense deduction for 2020 is

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