Rent expense in Marrin Company's 2015 income statement is $420,000.If Prepaid Rent was $70,000 at December 31,2014,and is $95,000 at December 31,2015,the cash paid for rent during 2015 is:

Question

Quizplus · Accepted Answer

Rent expense reflects the rent paid during the period, which is not necessarily the same as the total amount of rent for the period. To calculate the cash paid for rent during the year, we need to adjust for the change in the Prepaid Rent account. The cash paid for rent can be calculated as follows:

Cash paid for rent = Rent expense + Decrease in Prepaid Rent
Cash paid for rent = $420,000 + ($70,000 - $95,000)
Cash paid for rent = $445,000

Therefore, the answer is B.

Rent Expense in Marrin Company's 2015 Income Statement Is $420,000