At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be:

A) $1,200.

B) $2,700.

C) $1,900.

D) $1,500.

Question

Lea Harrison

Business

19 July, 16:33

At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be:

A) $1,200.

B) $2,700.

C) $1,900.

D) $1,500.

+2

Answers (1)

Know the Answer?

Rachel Faulkner · Answer 1

A) $1,200.

Explanation:

given data

Prepaid Insurance account balance = $2,700

Prepaid Insurance had expired = $1,500

solution

we know here

Insurance Expense (Dr.) = $1,500

Prepaid Insurance (Cr.) = $1,500

as adjusted balance for Prepaid Insurance = $1,200

and expired Insurance that is charge to be as Profit or Loss Statement is $1,500

because here

implies the adjust balance for Prepaid Insurance is as

adjust balance for Prepaid Insurance = 2,700 - 1,500

adjust balance for Prepaid Insurance = $1,200

At December 31, 2017, before any year-end adjustments, Macarty Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be:A) $1,200.B) $2,700.C) $1,900.D) $1,500.