Data Solutions reports operating expenses of $5 million.Operating expenses include rent expense.Prepaid rent at the beginning and end of the year are $120,000 and $80,000,respectively.All other operating expenses were paid in cash as incurred.What is the amount of cash paid for operating expenses?
A)$5,000,000.
B)$5,040,000.
C)$4,960,000.
D)$5,080,000.

Question

Quizplus · Accepted Answer

The amount of rent expense incurred during the year is $120,000 - $80,000 = $40,000. Therefore, the amount of cash paid for operating expenses is $5,000,000 - $40,000 = $4,960,000.

Data Solutions Reports Operating Expenses of $5 Million