Rent expense in Volusia Company's 2016 income statement is $420,000.If Prepaid Rent was $70,000 at December 31, 2015, and is $95,000 at December 31, 2016, the cash paid for rent during 2016 is:

Question

Quizplus · Accepted Answer

The cash paid for rent during 2016 can be calculated as follows:
Rent expense for 2016 = Prepaid rent at December 31, 2016 - Prepaid rent at December 31, 2015 + Cash paid for rent during 2016
$420,000 = $95,000 - $70,000 + Cash paid for rent during 2016
Cash paid for rent during 2016 = $420,000 + $70,000 - $95,000 = $395,000
Therefore, the best choice is B.

Rent Expense in Volusia Company's 2016 Income Statement Is $420,000