1. It is the end of March 20x1. At the beginning of January 20x1 your company entered and paid a bill from Business Insurance Associates for the annual insurance premium. A copy of the bill is below along with the asset section of the balance sheet at March 31, 20x1 and a section of the Profit and Loss report for three months. Your staff accountant let you know all month end journals have been booked. You are concerned about insurance expense for the month of March. What is wrong on March 31, 20x1 and how should it be corrected?

INVOICE INVOICE # 1710 DATE: JANUARY 1, 20X1 Business Insurance Associates 590 Main St. Dallas, TX 75023 Payment Terms Due Upon Receipt TO Student Company 123 Main Street Dallas, TX 75023 214-555-1212 SHIP Student Company TO 123 Main Street Dallas, TX 75023 214-555-12 12 QTY ITEM # UNIT PRICE 100 DISCOUNT LINE TOTAL 12 $1,200 DESCRIPTION Annual Business Insurance Coverage Term of Policy: 1/1/20x1 - 12/31/20x1 SUBTOTAL $1,200 TOTAL $1,200.00 THANK YOU FOR YOUR BUSINESS! Sample Company Profit and Loss January - March, 20x1 JAN 20x1 FEB 20x1 MAR 20x1 TOTAL 500.00 Expenses 650 Taxes, Insurance, and Professional Fees 651 Accounting and consulting fees 653 Insurance expense Total 650 Taxes, Insurance, and Professional Fees Total Expenses 300.00 100.00 400.00 300.00 100.00 400.00 $400.00 $0.00 $1,100.00 $200.00 $1,300.00 $1,300.00 500.00 $400.00 $500.00 Sample Company Balance Sheet As of March 31, 20x1 Total ASSETS Current Assets 100 Checking 120 Accounts Receivable 130 Inventory Asset 135 Prepaid Insurance Total Current Assets TOTAL ASSETS $ 7,000.00 1,450.00 4,425.00 1,000.00 $ 13,875.00 $ 13,875.00