Question

Bramble Corp. reported the following information for 2016:

	October	November	December
Budgeted purchases	$170000	$186000	$208000

• Operating expenses are: Salaries, $93000; Depreciation, $33000; Rent, $13000; Utilities, $21000
• 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?

A, $127,000

B. $126,500

C. $313,000

D. $160,000

Answer 1

	OPERATING EXPENSES OF BRAMBLE CORP. ARE AS BELOW,
	Salaries	$         93,000
	Depreciation Expenses	$         33,000
	Rent	$         13,000
	Utilities	$         21,000
	Total Operating Expenses	$     1,60,000
	In above expenses depreciation expenses are non cash expenses so no cash is paid
	for depreciation expenses
	Total Operating expenses	$     1,60,000
	Less: Depreciation expenses	$         33,000
	Cash paid for operating expenes	$     1,27,000
	Answer = Option A = $ 127,000