Question

Reid company pays for insurance policies in advance, recording the expenditure to prepaid insurance. the balance in the prepaid insurance account at the beginning and end of the year was $1,000 and $1,200, respectively. insurance expense during this period totaled $10,000. using this information, what is the total cash paid for insurance during the period?

Answer 1

The answer is "$10,200".

This is how we calculate this;
the balance in the prepaid insurance account at the beginning and end of the year was $1,000 and $1,200, respectively.
insurance expense during this period totaled $10,000.

total cash paid for insurance during the period = $10,000 + $1,200 - $1000 = $10,200