Malco Tile Shop purchased insurance coverage for two years on July 1, 2015, for its retail shop for $3,600. Malco recorded the prepayment as an asset. Malco prepares its adjusting entries at year end December 31.
A. What is the effect on the accounting equation of the adjusting journal entry necessary at December 31, 2015?
B How much will be reported on the balance sheet at December 31, 2015 for prepaid insurance?
C How much will be reported on the income statement for the year ended December 31, 2015, for insurance expense?
D If the adjustment in part A is not recorded, by what amount will net income be over or understated at December 31, 2015?
E How much will be reported on the statement of cash flows for the year ended December 31, 2015? In which activity? operating, investing, financing
F Identify the effects on accounts adjusted at December 31, 2016.
G How much will be reported on the balance sheet at December 31, 2016 for prepaid insurance?
H How much will be reported on the income statement for the year ended December 31, 2016, for insurance expense?
I How much will be reported on the statement of cash flows for the year ended December 31, 2016? In which activity? operating, investing, financing

Question

Malco Tile Shop purchased insurance coverage for two years on July 1, 2015, for its retail shop for $3,600. Malco recorded the prepayment as an asset. Malco prepares its adjusting entries at year end December 31.
A. What is the effect on the accounting equation of the adjusting journal entry necessary at December 31, 2015?
  B How much will be reported on the balance sheet at December 31, 2015 for prepaid insurance?
C How much will be reported on the income statement for the year ended December 31, 2015, for insurance expense?
D If the adjustment in part A is not recorded, by what amount will net income be over or understated at December 31, 2015?
E How much will be reported on the statement of cash flows for the year ended December 31, 2015? In which activity? operating, investing, financing
F Identify the effects on accounts adjusted at December 31, 2016.
G How much will be reported on the balance sheet at December 31, 2016 for prepaid insurance?
H How much will be reported on the income statement for the year ended December 31, 2016, for insurance expense?
I How much will be reported on the statement of cash flows for the year ended December 31, 2016? In which activity? operating, investing, financing

Quizplus · Accepted Answer

The Answer of Malco Tile Shop purchased insurance coverage for two years on July 1, 2015, for its retail shop for $3,600. Malco recorded the prepayment as an asset. Malco prepares its adjusting entries at year end December 31.
A. What is the effect on the accounting equation of the adjusting journal entry necessary at December 31, 2015?
  B How much will be reported on the balance sheet at December 31, 2015 for prepaid insurance?
C How much will be reported on the income statement for the year ended December 31, 2015, for insurance expense?
D If the adjustment in part A is not recorded, by what amount will net income be over or understated at December 31, 2015?
E How much will be reported on the statement of cash flows for the year ended December 31, 2015? In which activity? operating, investing, financing
F Identify the effects on accounts adjusted at December 31, 2016.
G How much will be reported on the balance sheet at December 31, 2016 for prepaid insurance?
H How much will be reported on the income statement for the year ended December 31, 2016, for insurance expense?
I How much will be reported on the statement of cash flows for the year ended December 31, 2016? In which activity? operating, investing, financing

Malco Tile Shop Purchased Insurance Coverage for Two Years on July