Fina Corp.had the following transaction during the quarter ended March 31, 2011:
Payment of fire insurance premium for calendar year 2011 600,000
What amount should be included in Fina's income statement for the quarter ended
March 31, 2011?

Question

Quizplus · Accepted Answer

The payment of the fire insurance premium should be allocated over the calendar year 2011, which means a portion of the payment should be included in each quarter's income statement. Since the payment was made in the first quarter, only one quarter's worth of the payment should be included in the income statement, which is $600,000/4 = $150,000.

Fina CorpHad the Following Transaction During the Quarter Ended March 31