Pickering Company's prepaid insurance was $8,000 at December 31,2015,and $10,000 at December 31,2016.Pickering reported insurance expense of $15,000 on the 2016 income statement.What amount would be reported in the statement of cash flows as insurance paid using the direct method?

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To determine the amount of insurance paid using the direct method, we need to start with the change in prepaid insurance balance from 2015 to 2016, which is an increase of $2,000 (i.e., $10,000 ending balance minus $8,000 beginning balance). We then need to subtract the insurance expense reported on the income statement, since this amount reflects the portion of prepaid insurance that was used up during the year. Therefore, the amount of insurance paid using the direct method is $2,000 + $15,000 = $17,000.

Pickering Company's Prepaid Insurance Was $8,000 at December 31,2015,and $10,000