14) ace enterprises purchased an 18 - month insurance policy on may 31, 2025 for $10,800. the december 31…

14) ace enterprises purchased an 18 - month insurance policy on may 31, 2025 for $10,800. the december 31, 2025 balance sheet would report prepaid insurance of f) $0 because prepaid insurance is reported on the income statement. g) $6,600. h) $10,800. j) $4,200.

14) ace enterprises purchased an 18 - month insurance policy on may 31, 2025 for $10,800. the december 31, 2025 balance sheet would report prepaid insurance of f) $0 because prepaid insurance is reported on the income statement. g) $6,600. h) $10,800. j) $4,200.

Answer

Explanation:

Step1: Calculate monthly insurance cost

Monthly cost = $\frac{10800}{18}=600$

Step2: Determine number of months elapsed

From May 31, 2025 to December 31, 2025, the number of months elapsed is 7 months.

Step3: Calculate used - up insurance amount

Used - up amount = $600\times7 = 4200$

Step4: Calculate prepaid insurance balance

Prepaid insurance balance = $10800 - 4200=6600$

Answer:

g) $6,600$