21) Fair Play, Inc. paid $3,600 on September 1, 2011 for an 18-month insurance policy beginning on that day. The company recorded the entire amount as prepaid insurance. How much insurance expense should the company show on its income statement for the year ended December 31, 2012?
A) $200
B) $2,400
C) $800
D) $3,600
22) Fair Play, Inc. paid $3,600 on September 1, 2011 for an 18-month insurance policy beginning on that day. The company recorded the entire amount as prepaid insurance. How much prepaid insurance should the company show on its balance sheet at December 31, 2011?
A) $2,800
B) $3,000
C) $800
D) $3,600
23) Fair Play, Inc. paid $3,600 on September 1, 2011 for an 18-month insurance policy beginning on that day. The company recorded the entire amount as prepaid insurance. How much prepaid insurance should the company show on its balance sheet at December 31, 2012?
A) $2,800
B) $3,200
C) $400
D) $3,600
24) Fair Play, Inc. paid $3,600 on September 1, 2011 for an 18-month insurance policy beginning on that day. The company recorded the entire amount as prepaid insurance. How much cash paid for insurance should the company show on its statement of cash flows for the year ended December 31, 2011?
A) $(200)
B) $(600)
C) $(800)
D) $(3,600)
25) Prepaid insurance had a balance of $1,000 on the company’s December 31, 2011 balance sheet. On June 1, 2012, the company paid an additional insurance premium of $3,000. Prepaid insurance had a balance of $1,250 on the company’s December 31, 2012 balance sheet. How much insurance expense will be reported on the company’s income statement for the year ended December 31, 2012?
A) $3,000
B) $4,250
C) $1,000
D) $2,750
26) Prepaid insurance had a balance of $1,000 on the company’s December 31, 2011 balance sheet. On June 1, 2012, the company paid an additional insurance premium of $3,000. Prepaid insurance had a balance of $1,250 on the company’s December 31, 2012 balance sheet. How much cash paid for insurance will be reported on the company’s statement of cash flows for the year ended December 31, 2012?
A) $(1,000)
B) $(3,000)
C) $(1,250)
D) $(4,000)
27) Clean Sweep, Inc. paid $7,200 on May 1, 2011 for 12 months’ insurance coverage starting May 1. How much insurance expense should appear on the company’s balance sheet at December 31, 2011?
A) $7,200
B) $4,200
C) $4,800
D) $0. Insurance expense does not appear on the balance sheet.
28) Clean Sweep, Inc. paid $7,200 on May 1, 2011 for 12 months’ insurance coverage starting May 1. How much insurance expense should appear on the company’s income statement for the year ended December 31, 2011?
A) $7,200
B) $4,200
C) $4,800
D) $0. Insurance expense does not appear on the income statement.
29) Clean Sweep, Inc. paid $7,200 on May 1, 2011 for 12 months’ insurance coverage starting May 1. How much prepaid insurance should appear on the company’s balance sheet at December 31, 2011?
A) $7,200
B) $2,400
C) $3,000
D) $4,800
30) Clean Sweep, Inc. started the month of June with $800 worth of cleaning supplies. During the month, Clean Sweep purchased $300 of supplies for cash. At June 30, $200 worth of supplies was unused. How much cleaning supplies expense will the company show on its income statement for the month of June?
A) $800
B) $500
C) $1,100
D) $900