Diablo Company reported the following information for 2016 and 2017: Prepaid insurance, 31 December 2016 $15...

Diablo Company reported the following information for 2016 and 2017:

Prepaid insurance, 31 December 2016 $15 000

Prepaid insurance, 31 December 2017 10 500

Insurance expense—2017 $31 000

How much cash was paid for insurance during 2017?

		$32 600
		$26 500
		$23 700
		$36 700

Expert Solution

The correct answer is $26,500.

Supporting calculations:

Balance of Prepaid Insurance as on 31 December, 2017	$10,500
Add: Insurance Expense in 2017	$31,000
Total amount paid for Insurance	$41,500
Less: Balance of Prepaid Insurance as on 31 December, 2016	($15,000)
Cash paid for insurance in 2017	$26,500

Therefore, cash paid for insurance in 2017 is $26,500.

ekkarill92 answered 2 years ago

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