Determining assets and expenses for accrual and cash accounting
On March 1, 2003, a company paid a $16,200 premium on a 36-month insurance policy for coverage
Beginning on that date. Refer to that policy and fill in the blanks in the following table:
Balance Sheet Insurance Asset Using Insurance Expense Using
Accrual Cash Accrual Cash
Basis Basis Basis Basis
Dec. 31, 2003 $_______ $_______ 2003 $_______ $_______
Dec. 31, 2004 _______ _______ 2004 _______ _______
Dec. 31, 2005 _______ _______ 2005 _______ _______
Dec. 31, 2006 _______ _______ 2006 _______ _______
Total $_______ $_______
Check 2005 insurance expense:
Accrual, $5,400; Cash, $0. Dec. 31, 2005,
Asset: Accrual, $900; Cash, $0.
