Balance sheet data for Betty DeRose, Inc. for 2017 appears below: January 1, 201

Question

 Balance sheet data for Betty DeRose, Inc. for 2017 appears below:                                    January 1, 2017       December 31, 2017 

 ASSETS:   Cash                               11,000                29,000   Accounts receivable                39,000                26,000   Allowance for doubtful accounts    <6,000>              <12,000>   Inventory                          54,000                89,000   Prepaid rent                       19,000                21,000   Land                               66,000                84,000   Equipment                          83,000                98,000   Accumulated depreciation          <21,000>              <39,000>  LIABILITIES + EQUITY:   Accounts payable                   29,000                22,000   Income taxes payable               18,000                30,000   Unearned revenue                   22,000                28,000   Notes payable                      63,000                75,000   Common stock                       70,000                80,000   Retained earnings                  43,000                61,000  Betty's 2017 income statement is given below: 

   Sales revenue                               400,000   Cost of goods sold                          293,000   Depreciation expense                         18,000   Bad debt expense                             14,000   Rent expense                                 29,000   Gain on sale of land                         16,000   Income tax expense                           25,000   Net income                                   37,000 

 It is known that during 2017 Betty DeRose, Inc. purchased land for $35,000 cash. Betty did not record any recoveries of previously written off accounts receivable during 2017. 

 Calculate the amount of cash paid for rent reported by Betty DeRose, Inc. in its 2017 statement of cash flows.  

Explanation / Answer

First we calculate the inventories purchases during the year:

Closing Inventory balance = $89000

Add: Cost of goods sold = $293000

Less: Opening Inventory = $54000

Total purchases during the year = $328000

Now, we calculate the total cash paid to suppliers for the purchases of inventory =

Opening Accounts Payable = $29000

Add: Purchases during the year = $328000

Less: Closing Accounts Payable = $22000

total Cash paid to suppliers = $335000

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