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Problem 1: On October 1, 2016, Adams Company paid $4,800 for a two-year insurance policy with the insurance coverage beginning on that date. As of December 31, 2016, which of the following account balances are correct after adjusting entries have been made? Option 1: Prepaid insurance $4,800, and Insurance expense $0. Option 2: Prepaid insurance $0, and Insurance expense $4,800.
Option 3: Prepaid insurance $2,400, and Insurance expense $2,400. Option 4: Prepaid insurance $4,200, and Insurance expense $600.
Financial Statement Analysis and Preparation
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Computation of Free Cash Flow
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