Question & Answer: 350,000. During the year, the accrued liabilities decreased by $15,000 and prepaid expens…..

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.

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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

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