reported in the operating activities section of Gateway's statement of cash flows for 2016: Net income $1,200,000 Increase in inventories 600,000 Decrease in accounts payable 400,000 Which one of the following conclusions can be assumed from the information provided? a. Gateway used the direct method to determine cash flows from operating activities. b. Gateway purchased more merchandise than it sold in 2016. c. Cash payments for merchandise purchases were less than the amount of merchandise purchased on credit during 2016. d. Cash payments for merchandise exceeded cost of goods sold by $200,000.