Answer:
The correct option is $457
Explanation:
The amount of cash paid in respect of insurance for the current period can arrived at using the below proforma or format:
Insurance expense in the year $477
less insurance prepaid in the previous year ($50)
add insurance prepaid this year $30
Cash paid for insurance in the current year $457
It is important to note that the question required actual cash paid in respect of insurance in the current year,full knowing that the beginning balances in prepayment was paid for last year implies that it should be deducted and the other way round for the closing insurance prepayment this year
