Question

Bean Manufacturing reported the following information for 2016: Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000 Operating expenses are paid during the month incurred. Accounts payable is used only for inventory acquisitions. How much is the budgeted amount of cash to be paid for operating expenses in November? $404,000 $148,000 $188,000 $444,000

Answer 1

Answer: $148,000

Explanation:

The Operating Expenses in the above question are, Salaries of $100,000, Depreciation of $40,000, Rent of $20,000 and Utilities of $28,000.

Depreciation is an operating expenses but not one that requires a cash payment as it is a non-cash Expenditure.

This means that in calculating the amount of cash to budget we add up all the other operating expenses except Depreciation.

= 100,000 + 20,000 + 28,000

= $148,000

$148,000 is the budgeted amount of cash to be paid for operating expenses in November.