Question

Handmade Soaps Company had operating expenses of $52,000. At the beginning of the year, Handmade Soaps owed $15,000 on accrued liabilities. At year-end, accrued liabilities were $5,000. How much cash did Handmade Soaps pay for operating expenses

Answer 1

Answer:

Cash Paid = $62000

Explanation:

To calculate the amount of cash paid by the business for operating expenses during the year, we use the following equation.

Cash Paid = Opening Accrued liability + Operating expenses for the year - Closing Accrued Liability

By plugging in the values for opening accrued liabilities, operating expenses for the year and closing accrued liabilities in the above formula, we can calculate the amount of cash paid for operating expenses.

Cash Paid = 15000 + 52000 - 5000

Cash Paid = $62000