Question
A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial statements: End of this
A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial statements: End of this year End of prior year Accounts receivable Cost of goods sold Sales revenue Accounts payable* Inventory Salary payable $105,000 $100,000 550,000 850,000 78,000 66,000 85,000 106,000 16,000 11,000 Salary expense 50,000 42,000 *Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts payable? A. The increase of $12,000 will be added to cost of goods sold. B. The increase of $12,000 will be added to net income. C. The increase of $12,000 will be subtracted from net income. D. The increase of $12,000 will be subtracted from cost of goods sold
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