Toro, Inc. paid $8,280 to renew its only insurance policy for three years on Mar

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Toro, Inc. paid $8,280 to renew its only insurance policy for three years on March 1, year 1, the effective date of the policy. At March 31, year 1, Toro's unadjusted trial balance showed a balance of $345 for prepaid insurance and $8,280 for insurance expense. What amounts should be reported for prepaid insurance and insurance expense in Toro's financial statements for the three months ended March 31, year 1?

Prepaid insurance

Insurance expense













Jones, a consultant, keeps her accounting records on a cash basis. During year 2, Jones collected $140,000 in fees from clients. At December 31, year 1, Jones had accounts receivable of $24,000. At December 31, year 2, Jones had accounts receivable of $47,000, and unearned fees of $4,200. On an accrual basis, what was Jones's service revenue for year 2?

a.  ☐$129,256

b.  ☐$132,949

c.  ☒$158,800

d.  ☐$166,186

A cash flow of $250,000 may be received by Lydia Nickels, Inc. in one year, two years, or three years, with probabilities of 25%, 60%, and 35%, respectively. The rate of interest on default risk-free investments is 6%.

What is the expected present value of Lydia Nickels' cash flow (in whole dollars)?

  1. ☐$132,380
  2. ☐$266,994
  3. ☐$265,930
  4. ☐$133,550

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(Top Tutor) Daniel C.
School: University of Maryland
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