Donnegan Company Reported Operating Expenses of $325,000 for 2015 On a Statement of Cash Flows for 2015, Using the Following

question 13

Multiple Choice

Donnegan Company reported operating expenses of $325,000 for 2015. The following data were extracted from the company's financial records: $\begin{array}{lrr}&12 / 31 / 14&12 / 31 / 15\\\text { Prepaid Expenses } & \$ 60,000 & \$ 69,000 \\\text { Accrued Expenses } & 210,000 & 255,000\end{array}$ On a statement of cash flows for 2015, using the direct method, cash payments for operating expenses should be

• A) $379,000.
• B) $361,000.
• C) $289,000.
• D) $271,000.

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Definitions:

Debt/Interest Problem

Issues arising from the management and repayment of borrowed funds, especially when the interest expenses become difficult to manage.

Numerical Approach

A method that involves applying algorithms and numerical techniques to solve mathematical problems.

External Funding Requirements

The amount of money a business needs to raise from outside sources to finance its operations and growth.

Accruals

Accounting adjustments for revenues and expenses that have been earned or incurred but not yet recorded in the accounts, to reflect the real-time financial performance.