Respuesta :
Answer:
The balance in ABC's Prepaid insurance-account as on Dec 31, 2018 is $27,000
Explanation:
Liability policy = ($54,000 / 18) × 6 months
Liability policy = $18,000
Crop damage policy = ($18,000 x 12 / 24)
Crop damage policy = $9,000
ABC's Prepaid insurance-account balance as on Dec 31, 2018 = $27,000
Thus,
Total Liability insurance period = 18
Now,
Expired period period - 12 months ( Jan 1, 2016 to Dec 31, 2016 )
Unexpired period = (18 - 12) months = 6 months
The balance in ABC's Prepaid insurance-account as on Dec 31, 2018 is $27,000
Calculation of the balance of Prepaid insurance account:
Since The liability policy was $54,000 for 18 months, and the crop damage policy was $18,000 for a two-year term.
So,
Liability policy = ($54,000 / 18) × 6 months
= $18,000
Now
Crop damage policy = ($18,000 x 12 / 24)
= $9,000
So, total balance is
= $18,000 + $9,000
= $27,000
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