Adjustment for Prepaid Rent Charles Company showed $63,000 in prepaid rent on December 31, 2011. On December 31, 2012, the balance in the prepaid rent account was $75,600. Rent expense for 2012 was $157,500.
1. What amount of cash was paid for rent in 2012?
2. Conceptual Connection: What adjustment in prepaid expenses is needed if the indirect method is used to prepare Charles’ statement of cash flows?