Freedom Wireless Reports Operating Expenses of $255,000

question 21

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:

Socially Efficient

An allocation of resources that results in the maximum possible economic benefit for society.

Marginal Revenue

The extra revenue generated from the sale of an additional unit of a product or service.

Deadweight Loss

The reduction in total surplus that results from a market distortion, such as a tax, subsidy, or price control.

Society's Welfare

A measure of the overall well-being and quality of life of the members of a society, often considered in economic terms but also including factors like health, education, and environmental quality.