At December 31, 2017, before any year-end adjustments, Doris Knitting Company's Insurance Expense account had a balance of $725 and its Prepaid Insurance account had a balance of $2,900. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be

Question

Quizplus · Accepted Answer

To calculate the adjusted balance for Insurance Expense for the year, we need to take into account the amount of prepaid insurance that expired during the year.

Prepaid insurance at the end of the year = $2,900 - $1,500 = $1,400

Insurance expense for the year = $1,400 + $725 = $2,125

However, we need to adjust the Insurance Expense account to reflect the actual amount incurred during the year.

Adjusted balance for Insurance Expense = $2,125 - $725 = $1,400

Therefore, the correct answer is Choice C: $2,225.

At December 31, 2017, Before Any Year-End Adjustments, Doris Knitting