Pilot Company reported the following information for 2015 and 2016. Prepaid insurance, December 31, 2015 $2,400
Prepaid insurance, December 31, 2016 1,500
Insurance expense--2016 14,200
How much cash was paid for insurance during 2016?
A) $13,300
B) $14,200
C) $15,100
D) $15,700

Question

Quizplus · Accepted Answer

Prepaid insurance decreased by $900 ($2,400 - $1,500) during 2016. This means that $900 of prepaid insurance was used during the year. Since insurance expense was $14,200, the total cash paid for insurance during 2016 was $14,200 + $900 = $15,100.

Pilot Company Reported the Following Information for 2015 and 2016