Washington Forest Products began operations on January 1, 2017. On December 31, 2017, the company’s accountant ascertains that the following amounts should be reported as expenses on the income statement:
Insurance expense .............................$20,000
Supplies expense .................................11,000
Rent expense ........................................14,000
A review of the company’s cash disbursements indicates that the company made related cash payments during 2017 as follows:
Insurance ............................................$29,000
Supplies ................................................27,000
Rent .........................................................8,000
a. Explain why the amounts shown as expenses do not equal the cash paid.
b. For each expense account, compute the amount that should be in the related balance sheet account as of December 31, 2017.