Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of 2012 and 2013, respectively. During 2013, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in 2013 were:

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Salaries payable increased from $60,000 to $90,000, indicating that Schneider had unpaid salaries from the previous year. Therefore, 2013 cash outflows for salaries would be the 2013 salary expense of $620,000 minus the increase in salaries payable of $30,000 ($90,000 – $60,000), which equals $590,000.