The Bank Statements of Waylon Taylor Textiles Ltd $20 \times 7$

question 87

Multiple Choice

The bank statements of Waylon Taylor Textiles Ltd. for $20 \times 7$ included the following items:
$\begin{array}{|l|r|}\hline \text { Insurance premiums paid } & \$ 12,400 \\\hline \text { Interest collected } & \$ 25,900 \\\hline \text { Salaries paid } & \$ 125,200 \\\hline\end{array}$
The following balances have been excerpted from the company's Statement of Financial Position:
$\begin{array}{|l|r|r|}\hline & \text { December 31, 20X7 } & \text { December 31, 20X6 } \\\hline \text { Prepaid insurance } & \$ 1,400 & \$ 1,700 \\\hline \text { Accrued interest receivable } & \$ 3,700 & \$ 2,900 \\\hline \text { Accrued salaries payable } & \$ 12,300 & \$ 10,600 \\\hline\end{array}$
-How much insurance expense should WTT report on its 20X7 statement of earnings?

• A) $15,100
• B) $12,700
• C) $12,100
• D) $9,600

---

Definitions:

Long-term Bank Loans

Long-term bank loans are borrowings from banks with repayment terms extending beyond one year, used for financing significant investments or operations.

Marketable Securities

Financial instruments that can be quickly converted into cash at a reasonably predictable price.

Capital Gains

The profit from the sale of assets or investments, such as shares or property, which exceeds the purchase cost.

Eligible Dividends

Dividends that are designated by corporations to be eligible for a lower tax rate in the hands of individuals, in certain jurisdictions.