Answered: what amount should Thrift report as…

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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Question

An analysis of Thrift Corp.’s unadjusted prepaid expense account at December 31, 2020, revealed the following: An opening balance of ₱1,500 for Thrift’s comprehensive insurance policy. Thrift had paid an annual premium of ₱3,000 on July 1, 2019. A ₱3,200 annual insurance premium payment made July 1, 2020. A ₱2,000 advance rental payment for a warehouse Thrift leased for one year beginning January 1, 2021. In its December 31, 2020 balance sheet, what amount should Thrift report as prepaid expenses?

a. P5,200

b. P3,600

c. P2,000

d. P1,600

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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