Krech Corporation's comparative balance sheet appears below:

Comparative Balance Sheet
	Ending Balance	Beginning Balance
Assets:
Current assets:
Cash and cash equivalents	$ 31,000	$ 28,000
Accounts receivable	18,000	20,000
Inventory	58,000	56,000
Prepaid expenses	12,000	10,000
Total current assets	119,000	114,000
Property, plant, and equipment	374,000	354,000
Less accumulated depreciation	190,000	165,000
Net property, plant, and equipment	184,000	189,000
Total assets	$ 303,000	$ 303,000
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$ 13,000	$ 9,000
Accrued liabilities	52,000	53,000
Income taxes payable	67,000	69,000
Total current liabilities	132,000	131,000
Bonds payable	76,000	73,000
Total liabilities	208,000	204,000
Stockholders equity:
Common stock	28,000	26,000
Retained earnings	67,000	73,000
Total stockholders equity	95,000	99,000
Total liabilities and stockholders' equity	$ 303,000	$ 303,000

The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities.

Which of the following is correct regarding the operating activities section of the statement of cash flows?

Multiple Choice

The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income

The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income

The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income

The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income