1.3) WX Company was started on January 1, 2009. During its first week of business,...
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1.3) WX Company was started on January 1, 2009. During its first week of business, the company paid $3,000 for 30 months' worth of fire insurance with an effective date of January 1, 2009. When WX Company prepares its financial statements for the year ended December 31, 2009, how much prepaid insurance will be shown on the balance sheet, and how much insurance expense will be shown on the income statement? Is the needed adjustment at year end related to an accrual or a deferral?
How much prepaid insurance will be shown on the balance sheet?
Select the formula you will use to calculate the prepaid insurance balance at December 31, 2009. Then enter the amounts and calculate the balance.
How much insurance expense will be shown on the income statement?
Select the formula you will use to calculate the insurance expense for the year ended December 31, 2009. Then enter the amounts and calculate the expense.
Is the needed adjustment at year end related to an accrual or a deferral?
This is an adjustment for ?(a deferral/ an accrual)? because cash was exchanged ?(after/ before) the expense was incurred.
Prepaid insurance
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