Question

In: Accounting

The prepaid insurance account has an unadjusted balance of $46,000 at December 31, 2018, the end...

The prepaid insurance account has an unadjusted balance of $46,000 at December 31,

2018, the end of Hanson Company's accounting year. Insurance expense has a $2,000 balance

at the same point in time.

The following policies are in effect at December 31, 2018:

Policy Type Date Acquired   Policy Term Total Premium Paid When Acquired

Liability 1-31-17 2 years $48,000

Auto 6-30-18 2 years . $9,000

Business interruption . 8-1-18 1 year $840

1. Determine the adjusted balance in prepaid insurance at December 31, 2018.

2. Determine the amount of total insurance expense (you need not separate the expense

by policy type) to report on the income statement for the year ended December 31,

2018.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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