Here's a simple one and I'm sure I'm making it harder than it is. What is the amount of cash paid for insurance during 2010?
Prepaid Insurance for 2010 is $2,400 2009 it was $ 2,900
Insurance expense is $3,800 taken from the 2010 income statement

Do I subtract 2,400 from 3,800 to get my amount of cash
Do I add 2009 and 2010 together then subtract what's on the income statement to get my answer? If this is so I come up with$1,500:confused:

At the end of 2009 and at the beginning of 2010 you have a $2,900 balance. Which means you paid for your insurance in andvance in 2009. Now you have $3,800 expense in year 2010, which means you are short $900 ($2,900 - 3,800) plus you have an ending balance of $2,400 so you have to add the $900 to 2,400 and you get your cash paid of $3,300 during the year.

Thank you that is great and has helped me.