The Following Information Relates to Layline Company Using the Direct Method of Reporting Cash Flows from Operating

question 126

Multiple Choice

The following information relates to Layline Company: $\begin{array}{lr}\text { Prepaid Insurance, December 31, } 2013 & \$ 302,000 \\\text { Prepaid Insurance, December 31, } 2014 & 280,000 \\\text { Insurance expense for 2014 } & 1,400,000\end{array}$ Using the direct method of reporting cash flows from operating activities, what was the amount of cash paid for insurance premiums by Layline during 2014?

• A) $1,378,000.
• B) $1,422,000.
• C) $1,680,000.
• D) $1,422,000

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