Question

Olsen Company paid or collected during 2014 the following items:

Insurance premiums paid $ 25,800
Interest collected 62,800
Salaries paid 260,400

The following balances have been excerpted from Olsen's balance sheets:

Dec 31, 2014 Dec 31, 2013

Prepaid insurance $ 2,400 $ 3,000
Interest receivable 7,400 5,800
Salaries and wages payable24,600 21,200

The insurance expense on the income statement for 2014 was
A.
$26,400.
B.
$20,400.
C.
$25,200.
D.
$31,200.

Answer 1

A. $26,400

Step-by-step explanation:

Prepaid insurance beginning balance $3,000

Add: Insurance paid during year $25,800

$28,800

Less: Prepaid insurance Ending balance $2,400

Insurance expense $26,400