Corporation formats operating cash flows using the indirect method.

Cramer's Income Statement for 2018

Sales revenue $170,000

Gain on sale of equipment 10,000* $180,000

Cost of goods sold $110,000

Depreciation 7,500

Other operating expenses 27,000 144,500

Net income $35,500

* The book value of equipment sold during 2018 was $22,000.

Cramer's Comparative Balance Sheets

December 31, 2018 and 2017

2018 2017 2018 2017

Cash $3,500 $2,000 Accounts payable $7,000 $8,000

Accounts receivable 6,000 11,000 Accrued liabilitie 9,000 1,000

Inventory 8,000 7,000 Common stock 20,000 10,000

Plant and equipment, net 89,000 71,000 Retained earnings 70,500 72,000

$106,500 $91,000 $106,500 $91,000

How do CramerCramer's accrued liabilities affect the company's statement of cash flows for 2018?

A.They don't because the accrued liabilities are not yet paid.

B.They increase cash used by financing activities.

C.They increase cash used by investing activities.

D.They increase cash provided by operating activities.