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Problem - Jarem Company showed $189,000 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was $226,800. Rent expense for 20X2 was $472,500.
Required -
1. What amount of cash was paid for rent in 20X2?
2. What adjustment in prepaid expenses is needed if the indirect method is used to prepare Jarem's statement of cash flows?
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