Company: Prepaid Insurance, December 31, 17. The following information relates to the West S500,000. What was the amount 00,000; Prepaid Insurance, December 31, 2013, s120,000; Insurance Expense for 2013, of cash West paid for insurance premiums during 2013? b. $600,000 c. $480,000 d. $520,000 Merchandise inventories were ble 18. The cost of merchandise sold during the year was $50,000. $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts paya were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total a. $49,000 b. $47,000 c. $51,000 d. $53,000 19. Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as: a. Financing activities b. Investing activities c. Operating activities d. Direct activities 20The relationship of $800,000 to $200,000 expressed as a ratio is: a. 4:1 b. 8:1 c. 2:1 d. 1:4 21. The ability of a business to pay its debts as they come due and to earm a reasonable amount of income is referred to as: a. solvency and leverage b. solvency and profitability c. solvency and liquidity d. solvency and equity