E-TEST m #1 of 11 The cost of merchandise sold during the year was $54,000. Merchandise inventories increased by $2,000. Accounts payable increased by $3,000. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise are calculated a. by taking the cost of merchandise sold plus an increase in merchandise inventory or minus a decrease in merchandise inventory, and plus a decrease in accounts payable or plus an increase in accounts payable. b. by taking the cost of merchandise sold plus an increase in merchandise inventory or plus a decrease in merchandise Inventory, and plus a decrease in accounts payable or minus an increase in accounts payable. c. by taking the cost of merchandise sold plus an increase in merchandise inventory or minus a decrease in merchandise inventory, and plus a decrease in accounts payable or minus an increase in accounts payable. d. by taking the cost of merchandise sold minus an increase in merchandise inventory or minus a decrease in merchandise inventory, and plus a decrease in accounts payable or minus an increase in accounts payable. I'm Done Next