The adjusted trial balances of King Corporation at August ​31, 2024​, and August ​31, 2023​, include these amounts​ (in millions):
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King Corporation complete these transactions​ (in millions) during the year ended August ​31, 2024.
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Part 1
The sales revenue (in millions) for the year ended August 31, 2024 =
$20,320
 
Part 2
The insurance expense (in millions) for the year ended August 31, 2024 =
 
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Trial balance amounts
 
2024
2023
Accounts receivable
$500
$280
Prepaid insurance
340
470
Accrued liabilities payable (for other operating expenses)
800
680
 

To calculate the insurance expense for the year ended August 31, 2024, we will use the information provided from the trial balance. The relevant accounts to focus on are **Prepaid Insurance** for both 2023 and 2024, and any changes during the period that indicate the insurance expense for the year.

Here is the step-by-step process to find the insurance expense:

### Step 1: Understand Prepaid Insurance
Prepaid Insurance represents the amount that the company has already paid for insurance coverage in advance but has not yet used by the balance sheet date. When the insurance period passes, the corresponding portion is recorded as an **expense**.

### Step 2: Identify Beginning and Ending Balances of Prepaid Insurance
From the trial balance:

- **Prepaid Insurance (2023)**: \$470 million (beginning balance)
- **Prepaid Insurance (2024)**: \$340 million (ending balance)

### Step 3: Apply the Formula for Insurance Expense
The formula to calculate the insurance expense is:

\[
\text{Insurance Expense} = \text{Prepaid Insurance (Beginning)} - \text{Prepaid Insurance (Ending)} + \text{Cash Paid for Insurance During the Year}
\]

However, since no direct information about the cash paid for insurance during the year has been provided, we will assume that all prepaid insurance is used and expensed during the year. Therefore, the insurance expense will be the difference between the beginning and ending balances of Prepaid Insurance.

\[
\text{Insurance Expense} = 470\, \text{million} - 340\, \text{million} = 130\, \text{million}
\]

### Final Answer:
The **insurance expense** for the year ended August 31, 2024, is **$130 million**.

Would you like more details or have any other questions?

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Here are 5 related questions to expand your understanding:
1. How would cash payments for insurance affect this calculation if provided?
2. How are prepaid expenses different from accrued expenses?
3. What happens to the insurance expense if the prepaid balance increases during the year?
4. How do companies typically record the consumption of prepaid insurance in their books?
5. What effect does the insurance expense have on the company's income statement?

**Tip:** Always check both the beginning and ending balances of prepaid expenses to calculate the amount that has been consumed or used as an expense during the period.

The adjusted trial balances of King Corporation at August 31, 2024, and August 31, 2023, include these amounts (in millions):

King Corporation complete these transactions (in millions) during the year ended August 31, 2024.

The sales revenue (in millions) for the year ended August 31, 2024 = $20,320
The insurance expense (in millions) for the year ended August 31, 2024 = ?

Trial balance amounts for 2024 and 2023:
Accounts receivable 2024 = $500, 2023 = $280
Prepaid insurance 2024 = $340, 2023 = $470
Accrued liabilities payable 2024 = $800, 2023 = $680

Learn how to calculate the insurance expense for King Corporation for the year ended August 31, 2024, using trial balance data. Understand prepaid expenses, including how to apply the formula for insurance expense based on the beginning and ending balances of prepaid insurance. Suitable for undergraduate accounting students.

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