Cridwell Company\'s selling and administrative expenses for last year totaled $2

Question

Cridwell Company's selling and administrative expenses for last year totaled $210,000. During the year, the company's prepaid expense account balance increased by $18,000, and accrued liabilities increased by $12,000. Depreciation charges for the year were $24,000. Based on this information, selling and administrative expenses adjusted to a cash basis under the direct method on the statement of cash flows would be

A. $228,000.
B. $240,000.
C. $192,000.
D. $180,000.
***Please SHOW HOW to do this!

Explanation / Answer

C. $192,000. Working : Cash inflow:     Depreciation $24,000   Accrued liabilities $12,000   Cash inflow from operating activities   $36,000        Cash out flow:     Selling & Administrative Expense $210,000   Increase in prepaid expense $18,000   Cash out flow from operating activities   $228,000 Net cash out flow from operating activities:   $192,000                                          (OR)       Selling & Administrative Expense $210,000 Increase in prepaid expense $18,000 Depreciation ($24,000) Accrued liabilities ($12,000) Total cash out flow from operating actibities: $192,000
C. $192,000. Working : Working : Cash inflow:     Depreciation $24,000   Accrued liabilities $12,000   Cash inflow from operating activities   $36,000        Cash out flow:     Selling & Administrative Expense $210,000   Increase in prepaid expense $18,000   Cash out flow from operating activities   $228,000 Net cash out flow from operating activities:   $192,000 Cash inflow: Depreciation $24,000 Accrued liabilities $12,000 Cash inflow from operating activities $36,000    Cash out flow: Selling & Administrative Expense $210,000 Increase in prepaid expense $18,000 Cash out flow from operating activities $228,000 Net cash out flow from operating activities: $192,000                                          (OR)       Selling & Administrative Expense $210,000 Increase in prepaid expense $18,000 Depreciation ($24,000) Accrued liabilities ($12,000) Total cash out flow from operating actibities: $192,000                                          (OR) Selling & Administrative Expense $210,000 Increase in prepaid expense $18,000 Depreciation ($24,000) Accrued liabilities ($12,000) Total cash out flow from operating actibities: $192,000

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