Rent expense in Volusia Company's 2014 income statement is $420,000.If Prepaid Rent was $70,000 at December 31,2013,and is $95,000 at December 31,2014,the cash paid for rent during 2014 is:

Question

Quizplus · Accepted Answer

The cash paid for rent during 2014 can be calculated as follows:

Rent expense for the year = Cash paid for rent - decrease in prepaid rent 
$420,000 = Cash paid for rent - ($70,000 - $95,000) 
$420,000 = Cash paid for rent - (-$25,000) 
$420,000 = Cash paid for rent + $25,000 
Cash paid for rent = $420,000 - $25,000 = $395,000

Therefore, the answer is (B) $445,000.

Rent Expense in Volusia Company's 2014 Income Statement Is $420,000