The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company.

(1.) Graham reports a loss on sale of land (to an outside party) of $5,000. The land cost Graham $20,000.

(2.) Noncontrolling interest in Stage's net income was $30,000.

(3.) Graham paid dividends of $15,000.

(4.) Stage paid dividends of $10,000.

(5.) Excess acquisition-date fair value over book value amortization was $6,000.

(6.) Consolidated accounts receivable decreased by $8,000.

(7.) Consolidated accounts payable decreased by $7,000.

Using the indirect method, where does the decrease in accounts payable appear in a consolidated statement of cash flows?

rev: 11_06_2019_QC_CS-189499

Multiple Choice

• $7,000 increase to net income as an operating activity.

• $7,000 increase as a financing activity.

• $5,600 decrease to net income as an operating activity.

• $5,600 increase to net income as an operating activity.

• $7,000 decrease to net income as an operating activity.