LO6 KOM pays the following insurance premiums during 2010:

a. If KOM uses the accrual method of accounting, what is the insurance expense deduction for 2010?

b. If KOM uses the cash method of accounting, what is the insurance expense deduction for 2010?

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Auto accident and liability insurance: Paid 1/1/10 Coverage period 1/1/10-12/31/10 Fire, storm, and other casualty insurance: $3,500 Paid 4/1/10 Coverage period 4/1/10-3/31/12 Business liability insurance: $5,000 Paid 5/1/10 Coverage period 5/1/10-4/30/11 $3,000