Farley Company reported the following information for 2016: $\begin{array}{llcc}
&\underline{\text { September }} &\underline{\text { October }}& \underline{\text { November }}&\underline{\text { December }}&\underline{\text { January }}\
\text { Budgeted purchases }&\$90,000&\$120,000&\$128,000&\$144,000&\$88,000
\end{array}$
Operating expenses are: Salaries, $50,000; Depreciation, $20,000; Rent, $10,000; Utilities, $14,000.
-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)$202,000
B)$74,000
C)$94,000
D)$222,000

Question

Farley Company reported the following information for 2016: $\begin{array}{llcc}
&\underline{\text { September }} &\underline{\text { October }}& \underline{\text { November }}&\underline{\text { December }}&\underline{\text { January }}\
\text { Budgeted purchases }&\$90,000&\$120,000&\$128,000&\$144,000&\$88,000
\end{array}$
 Operating expenses are: Salaries, $50,000; Depreciation, $20,000; Rent, $10,000; Utilities, $14,000. 
-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)$202,000
B)$74,000
C)$94,000
D)$222,000

Quizplus · Accepted Answer

The budgeted amount of cash to be paid for operating expenses in November is the sum of all operating expenses except depreciation, which is a non-cash expense. Therefore, the cash expenses are: Salaries ($50,000) + Rent ($10,000) + Utilities ($14,000) = $74,000.

Farley Company Reported the Following Information for 2016 Operating Expenses Are: Salaries, $50,000; Depreciation, $20,000; Rent, $10,000; Utilities