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) $195,000.
B) $145,000.
C) $230,000.
D) $355,000.

Question

Quizplus · Accepted Answer

Operating expenses adjusted to a cash basis = Total operating expenses + Decrease in accrued liabilities + Increase in prepaid expenses - Depreciation expense
= $350,000 + $15,000 + $10,000 - $20,000 = $355,000

Total Operating Expenses on Opal Company's Income Statement for Last