42. Lawrence Company reported the following account balances on its income statement: cost of goods sold- $500,000, rent expense-$48,000, and salary expense-$75,000. During the year, prepaid rent went down by $10,000, accounts payable went down $22,000, salary payable went up $18,000, and inventory went up by $14,000. Determine the amount of cash paid for salaries. a. $93,000 b. $57,000 C. $75,000 d. c. $18,000 $92,000 43. Which of the following is true of the indirect method used to determine the cash flow from operating activities? a. b. c. d. c. The indirect method results in a greater amount of cash flow than the direct method. FASB prefers the use of indirect method. The indirect method starts with the amount of net income. Majority of the reporting companies in U.S. uses the direct method. Nonoperating gains and losses are ignored while computing cash flows from operations. 44. Which of the following would be subtracted from net income when computing cash flows from operating activities using the indirect method? An increase in rent payable for the year b. Depreciation expense c. A decrease in inventory for the year d. An increase in prepaid rent or the year C. A loss on the sale of equipment 45. Which of the following would be added to net income when computing cash flows from operating activities using the indirect method? An increase in accounts receivable A gain on the sale of land b. A decrease in insurance payable c. d. c. An increase in prepaid rent Depreciation expense 46. Which of the following is an operating activity? Paying dividends Issuing common stock Paying interest a. b. c. d. c. Proceeds from long-term debt Repurchase of common stock