MNO Ltd purchased a one-year insurance policy on 1 April. The entire premium of $6000 was recorded
Question:
MNO Ltd purchased a one-year insurance policy on 1 April. The entire premium of $6000 was recorded by debiting prepayments. Year-end is 30 June.
1. Give the 30 June adjusting entry.
2. What amount should be reported in the 30 June balance sheet for prepayments?
3. If no adjusting entry was made on 30 June, by how much would net profit be overstated or understated? Would assets be overstated or understated?
4. What would your adjusting entry in question 1 be if the premium of $6000 was recorded by debiting insurance expense?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answered By
Utsab mitra
I have the expertise to deliver these subjects to college and higher-level students. The services would involve only solving assignments, homework help, and others.
I have experience in delivering these subjects for the last 6 years on a freelancing basis in different companies around the globe. I am CMA certified and CGMA UK. I have professional experience of 18 years in the industry involved in the manufacturing company and IT implementation experience of over 12 years.
I have delivered this help to students effortlessly, which is essential to give the students a good grade in their studies.
2+ Reviews
10+ Question Solved
Related Book For 
Financial Accounting An Integrated Approach
ISBN: 9780170349680
6th Edition
Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson
Question Posted:
