Question & Answer: Total operating expenses on Ocean Company's income statement for last year totaled $400,000. During the year, accrued liabilities increas…..

Total operating expenses on Ocean Company’s income statement for last year totaled $400,000. During the year, accrued liabilities increased by $23,000 and prepaid expenses increased by $16,000. Depreciation expense for the year was $30,000. Based on this information, operating expenses adjusted to a cash basis under the direct method on the statement of cash flows would be:

a.$518,000.

b.$363,000.

c.$272,000.

d.$300,000.