Hackett Company's prepaid rent was $9,000 at December 31 Year 1 and $12,000 at December 31, Year 2. Hackett reported rent expense of $41,000 on its Year 2 income statement. What would be reported as cash paid for rent on the statement of cash flows?

Question

Quizplus · Accepted Answer

The cash paid for rent is calculated by adjusting the rent expense for the change in prepaid rent: $41,000 (rent expense) + $3,000 (increase in prepaid rent from $9,000 to $12,000) = $44,000.

Hackett Company's Prepaid Rent Was $9,000 at December 31 Year