The income statement of Dolan Corporation for 2014 included the following items: The following balances have been excerpted from Dolan Corporation's balance sheets: The cash paid for insurance premiums during 2014 was
A) $16,000.
B) $15,200.
C) $19,000.
D) $17,400.

Question

The income statement of Dolan Corporation for 2014 included the following items:  The following balances have been excerpted from Dolan Corporation's balance sheets:  The cash paid for insurance premiums during 2014 was
A) $16,000. 
B) $15,200. 
C) $19,000. 
D) $17,400.

Quizplus · Accepted Answer

The cash paid for insurance premiums can be calculated as follows:

Insurance premiums paid = Prepaid insurance (end of year) - Prepaid insurance (beginning of year) + Insurance expense

= $45,000 - $36,000 + $8,400

= $17,400

The Income Statement of Dolan Corporation for 2014 Included the Following