Freedom Wireless Reports Operating Expenses of $255,000

question 53

Essay

Freedom Wireless reports operating expenses of $255,000.Operating expenses include both rent expense and salaries expense.Prepaid rent decreases during the year by $10,000 and salaries payable increases by $25,000.What is the cash paid for operating expenses during the year?

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Definitions:

Model

In science and engineering, a model is a simplified representation of a system or phenomenon, used to simulate and analyze its behavior.

Applicable

Capable of or suitable for being applied; relevant or appropriate in a given situation.

Leverage

The use of various financial instruments or borrowed money to increase the potential return of an investment.

Linear Model

A mathematical representation of a relationship between two or more variables where the effect is proportional to the cause.