Rent expense in Volusia Company's 2018 income statement is $420,000.If prepaid rent was $70,000 at December 31,2017,and is $95,000 at December 31,2018,the cash paid for rent during 2018 is

Question

Quizplus · Accepted Answer

To find the cash paid for rent during 2018, we need to subtract the increase in prepaid rent from the rent expense reported in the income statement, and then add the decrease in prepaid rent:
Cash paid for rent = Rent expense - Increase in prepaid rent + Decrease in prepaid rent
Cash paid for rent = $420,000 - ($95,000 - $70,000) 
Cash paid for rent = $420,000 - $25,000
Cash paid for rent = $395,000 
Therefore, the correct answer is B) $445,000.

Rent Expense in Volusia Company's 2018 Income Statement Is $420,000