Question

Campbell County uses the consumption method to record all inventories and prepayments. The County has a 9/30 fiscal year-end. On April 1, 2018, the County purchased a two-year insurance policy at a total cost of $400,000, paying for the policy out of the General Fund. In the fund financial statements, the amount of insurance expenditures for the fiscal year ended 9/30/18 would be

Answer 1

the amount is $100,000

Step-by-step explanation:

The computation of the amount of the insurance expenditure for the fiscal year is shown below:

= Total cost of two year insurance policy × given percentage

= $400,000 × 6 ÷ 24

= $100,000

The six months are calculated from April 1 to Sep 30

The same is to be considered

hence, the amount is $100,000