Clare Company had total operating expenses of $185000 in 2016 which included Depreciation Expense of $36000. Also during 2016 prepaid expenses increased by $8000 and accrued expenses decreased by $7600.
Instructions
Calculate the amount of cash payments for operating expenses in 2014 using the direct method.

Question

Safia Afroz · Accepted Answer

Final Answer :   Operating expenses  $ 185 , 000 Less: Noncash depreciation expense  ( 36 , 000 ) Add: Increase in prepaid expenses  8 , 000  Add: Decrease in accrued liabilities.  7 , 600 ‾ Cash payments for operating expenses  $ 164 , 600 ‾ \begin{array}{llr}  	ext { Operating expenses }  & \$185,000\ 	ext {Less: Noncash depreciation expense  }  & (36,000)\ 	ext {Add: Increase in prepaid expenses  } &  8,000 & \ 	ext { Add: Decrease in accrued liabilities. }  & \underline{7,600}\ 	ext {Cash payments for operating expenses  }  & \underline{\$164,600}\\end{array}  Operating expenses  Less: Noncash depreciation expense  Add: Increase in prepaid expenses   Add: Decrease in accrued liabilities.  Cash payments for operating expenses  ​ $185 , 000 ( 36 , 000 ) 8 , 000 7 , 600 ​ $164 , 600 ​ ​ ​

Definitions

Learning Objectives

Learning Objectives

Related questions