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17 August, 10:41

Ludwig Company's prepaid rent was $9,500 at December 31, 2020, and $15,000 at December 31, 2021. Ludwig reported rent expense of $23,500 on the 2021 income statement. What amount would be reported in the statement of cash flows as rent paid using the direct method?

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  1. 17 August, 10:54
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    Answer: The correct answer is $29,000.

    Explanation: Statement of cash flow refers to a part of the financial statement that shows the actual movement of cash in the business for a givene period.

    The actual rent to be reflected on the statement of cash flow using the direct method is calculated as ending value + actual expense - opening value

    = $15,000.00 + $23,500.00 - $9,500.00

    =$29,000.00
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