On June 1st, 2017 Cougar Corp pays for 3-years of prepaid insurance by paying $3,600. What...

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On June 1st, 2017 Cougar Corp pays for 3-years of prepaid insurance by paying $3,600. What would be the amound of prepaid insurance listed under current assets on Cougar Corp's 2017 Balance Sheet?

$700

$2,900

$1,200

$1,700

ekkarill92 answered 1 year ago

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On January 1, 2020, the balance in Todd Co's "Prepaid Insurance" account was $3,600. At the December 31 year end, the balance was $1,200. In Todd's Cash Flow Statement for the year ended 12/31/2020, the net $2,400 net decrease will be A Subtracted from Net Income in determining net cash provided by operating activities B Reported as a cash inflow from financing activities C Reported as a cash outflow from financing activities D Added to Net Income in determining net...

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Prepaid insuance expired = 3600/36*7 = $700

Prepaid insurance listed under current assets = 3600-700 = $2900

Option 2 is correct

The Aaron Corp purchased a new computer system on June 11, 2017, for $680,000. What is the maximum deduction Aaron can take this year on this computer system? Show your computations and discuss/explain the alternatives in how you arrive at your answer.

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