The following information is given for Building Inc.:
$$\begin{array} { | l | c | c | }
\hline \text { As of } 12 / 31 & 2005 &{ 2004 } \
\hline \text { PP\&E } & \$ 570,000 & \$ 530,000 \
\hline \text { Accumulated Depreciation } & \$ 102,000 & \$ 92,000 \
\hline \text { Depreciation Expense } & \$ 30,000 & \$ 32,000 \
\hline
\end{array}$$ During 2005 new assets were purchased for of $78,000, and plant assets were sold at a $10,000 loss.
-Beginning and ending prepaid insurance is, respectively, $36,000 and $26,500. During the period, $30,500 of insurance expense was recorded. How much new insurance was purchased?
A) $2,500
B) $15,600
C) $49,000
D) $21,000

Question

The following information is given for Building Inc.:
 $$\begin{array} { | l | c | c | } 
\hline \text { As of } 12 / 31 & 2005 &{ 2004 } \
\hline \text { PP\&E } & \$ 570,000 & \$ 530,000 \
\hline \text { Accumulated Depreciation } & \$ 102,000 & \$ 92,000 \
\hline \text { Depreciation Expense } & \$ 30,000 & \$ 32,000 \
\hline
\end{array}$$ During 2005 new assets were purchased for of $78,000, and plant assets were sold at a $10,000 loss.
-Beginning and ending prepaid insurance is, respectively, $36,000 and $26,500. During the period, $30,500 of insurance expense was recorded. How much new insurance was purchased?
A) $2,500
B) $15,600
C) $49,000
D) $21,000

Quizplus · Accepted Answer

The change in prepaid insurance is calculated as: Beginning prepaid insurance ($36,000) - Ending prepaid insurance ($26,500) + Insurance expense ($30,500) = New insurance purchased ($21,000).

The Following Information Is Given for Building Inc During 2005 New Assets Were Purchased for of $78,000, and |