Goodfellow Corporation reported insurance expense of $477 for the current year. The beginning and ending balances in the prepaid insurance account were $50 and $30, respectively. What was the amount of cash paid for insurance?

Question

Quizplus · Accepted Answer

We can calculate the amount of insurance purchased during the year by taking the difference between the beginning and ending balances in the prepaid insurance account:

Beginning balance - Ending balance = Amount of insurance purchased
$50 - $30 = $20

Since the total insurance expense for the year was $477, we can determine the amount of cash paid for insurance by subtracting the amount of insurance purchased from the total insurance expense:

Total insurance expense - Amount of insurance purchased = Cash paid for insurance
$477 - $20 = $457

Therefore, the amount of cash paid for insurance was $457, which is answer choice B.

Goodfellow Corporation Reported Insurance Expense of $477 for the Current