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

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Definitions:

Transactions

Financial events that involve an exchange of value between two parties, affecting the accounting equation.

Tax Planning

The process of analyzing one's financial situation or plan to ensure tax efficiency, with the aim of minimizing tax liability and maximizing compliance.

Market Research

The process of gathering, analyzing, and interpreting information about a market, including potential customers and competitors, to inform business decisions.

Auditing

The process of examining an organization's financial records to ensure accuracy and compliance with accounting standards and regulations.