Ubber Company\'s prepaid insurance was $9,500 at December 31, 2012, and $13,500
ID: 2486259 • Letter: U
Question
Ubber Company's prepaid insurance was $9,500 at December 31, 2012, and $13,500 at December 31, 2013. Ubber reported insurance expense of $19,500 on the 2013 income statement. What amount would be reported in the statement of cash flows as insurance paid using the direct method?
$15,500.
$19,500.
$29,000.
$23,500.
Ubber Company's prepaid insurance was $9,500 at December 31, 2012, and $13,500 at December 31, 2013. Ubber reported insurance expense of $19,500 on the 2013 income statement. What amount would be reported in the statement of cash flows as insurance paid using the direct method?
Explanation / Answer
Increase in prepaid expense = 13,500 – 9,500
=$4,000
Reported in statement of cash flow
= insurance expense + increase in prepaid expense
=$19,500 + $4,000
= $23,500 answer
Increase in prepaid expense = 13,500 – 9,500
=$4,000
Reported in statement of cash flow
= insurance expense + increase in prepaid expense
=$19,500 + $4,000
= $23,500 answer
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