Detmer Company's prepaid rent was $40,000 at December 31, 2011, and $15,000 at December 31, 2010. Detmer's income statement for 2011 reported rent expense as $10,000. What amount of cash disbursements for rent would be reported in Detmer's net cash flows from operating activities for 2011 presented on a direct basis?

Question

Quizplus · Accepted Answer

The decrease in prepaid rent ($40,000 - $15,000 = $25,000) plus the rent expense reported on the income statement ($10,000) equals the cash disbursements for rent ($25,000 + $10,000 = $35,000).

Detmer Company's Prepaid Rent Was $40,000 at December 31, 2011