In its cash flow statement for the current year, fox co. reported cash paid for interest of $70,000. fox did not capitalize any interest during the current year. decreases occurred in several balance sheet accounts as follows:

accrued interest payable $17,000

prepaid interest 23,000

in its income statement for the current year, what amount should fox report as interest expense?

$76,000

Explanation:

The calculation of the interest expense is shown below:

= Reported amount of cash paid for interest + Decrease in prepaid interest - decrease in accrued interest payable

= $70,000 + $23,000 - $17,000

= $76,000

The decrease in prepaid interest is classified as a current asset and the  accrued interest payable is current liabilities and we know that the rise in current assets and a decline in current liabilities are excluded, while the decline in current assets and an increase in current liabilities are included.

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answer(d) all of the choices are correct;