A retail business, using the accrual method of accounting, owed merchandise creditors (accounts payable) $300,000 at the

Question:

A retail business, using the accrual method of accounting, owed merchandise creditors (accounts payable) $300,000 at the beginning of the year and $340,000 at the end of the year. How would the $40,000 increase be used to adjust net income in determining the amount of cash flows from operating activities by the indirect method? Explain.