The Ling Corporation reported a beginning balance of $1,200 in its prepaid insurancePrepaid Insurance account for 2014.During the year,a total of $16,000 was recognized as insurance expense and the prepaid insurancePrepaid Insurance account had an ending balance of $1,600.How much cash did Ling pay for insurance during 2014the year?
A) $17,200
B) $16,000
C) $16,400
D) $14,800

Question

Quizplus · Accepted Answer

Beginning balance of Prepaid Insurance + Cash outflow to pay for insurance - Cost of goods sold = Ending balance of Prepaid Insurance
$1,200 + Cash outflow to pay for insurance - $16,000 = $1,600
Cash outflow to pay for insurance = $1,600 - $1,200 + $16,000 = $16,400

The Ling Corporation Reported a Beginning Balance of $1,200 in Its