Ludwig Company's prepaid rent was $9,000 at December 31,2015,and $13,000 at December 31,2016.Ludwig reported rent expense of $19,000 on the 2016 income statement.What amount would be reported in the statement of cash flows as rent paid using the direct method?

Question

Quizplus · Accepted Answer

To calculate the rent paid using the direct method, we need to use the formula:
Rent expense - Increase in prepaid rent + Decrease in prepaid rent = Rent paid

Substituting the given values, we get:
$19,000 - ($13,000 - $9,000) = $15,000

Therefore, the rent paid using the direct method would be $15,000, which is option C.

Ludwig Company's Prepaid Rent Was $9,000 at December 31,2015,and $13,000