Determine the cash payments made during the year for rent from the following information.
$
Rent expense (income statement) 475
Prepaid Rent:
Beginning Balance 195
Ending Balance 220
Assume all insurance premiums are paid in cash.

Question

Quizplus · Accepted Answer

The cash payments for rent can be calculated by adjusting the rent expense for the change in prepaid rent. The formula is: Rent Expense + Increase in Prepaid Rent = Cash Payments. Here, $475 + ($220 - $195) = $500.

Determine the Cash Payments Made During the Year for Rent