I posted a question and didn't get it answered, why?
The Joseph, Inc. uses the accrual basis of accounting. Joseph's insurance expense account had a $23,000 balance at the end of the year. The prepaid insurance account had a $6,000 balance at the beginning of the year and a $3,000 balance at the end of the year. How much cash was paid for insurance during the year?
Your question wasn't answered because none of our regular tutors is an expert in insurance or accounting.
That sucks, but thanks anyways.
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Regarding your current question, to determine the cash paid for insurance during the year, we need to consider the changes in the prepaid insurance account balance. We start with a beginning balance of $6,000 and end with a balance of $3,000.
To calculate the cash paid for insurance, we need to account for any changes in the prepaid insurance account during the year. In this case, the prepaid insurance balance decreased by $3,000 ($6,000 - $3,000).
Since prepaid insurance represents the amount paid in advance, this decrease means that $3,000 of the prepaid insurance was used during the year. Therefore, the cash paid for insurance during the year would be $3,000.