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Total operating expenses on Opal Company’s income statement for last year totaled $350,000. During the year, the accrued liabilities decreased by $15,000 and prepaid expenses increased by $10,000. Depreciation expense for the year was $20,000. Based on this information, operating expenses adjusted to a cash basis under the direct method on the statement of cash flows would be:
a.$355,000.
b.$195,000.
c.$145,000.
d.$230,000.
Expert Answer
| Please find below the answer and please give thumbs up | |
| Statementshowing Computations | |
| Paticulars | Amount |
| Expenses as per income statement | 350,000.00 |
| Add Decrease in Accrued Liabilities | 15,000.00 |
| Add Increase in prepaid expenses | 10,000.00 |
| Less Depreciation | (20,000.00) |
| expenses adjusted to a cash basis under the direct method | 355,000.00 |
