Pilot Company reported the following information for 2017 and 2018: $$\begin{array} { l r }
\text { Prepaid insurance, December } 31,2017 & \$ 2,400 \
\text { Prepaid insurance, December } 31,2018 & 1,500 \
\text { Insurance expense-2018 } & 14,200
\end{array}$$
How much cash was paid for insurance during 2018?

A)$13,300
B)$14,200
C)$15,100
D)$15,700

Question

Pilot Company reported the following information for 2017 and 2018: $$\begin{array} { l r } 
\text { Prepaid insurance, December } 31,2017 & \$ 2,400 \
\text { Prepaid insurance, December } 31,2018 & 1,500 \
\text { Insurance expense-2018 } & 14,200
\end{array}$$
How much cash was paid for insurance during 2018?

A)$13,300
B)$14,200
C)$15,100
D)$15,700

Quizplus · Accepted Answer

The decrease in prepaid insurance from 2017 to 2018 is $2,400 - $1,500 = $900. This represents the amount of insurance that expired during 2018. Since the insurance expense for 2018 was $14,200, the cash paid for insurance during 2018 must have been $14,200 - $900 = $13,300.

Pilot Company Reported the Following Information for 2017 and 2018