A2 A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:End of prior yearEnd of this year$115,000$100,000520,000850,000Accounts receivableCost of goods soldSales revenue65,000110,00012,00044,000Accounts payable*81,000Inventory92,000Salary payable15,500Salary expense50,000*Relates solely to the acquisition of inventoryWhat will appear in the operating activities section related to accounts payable?A. The increase of $16,000 will be subtracted from net income.B. The increase of $16,000 will be subtracted from purchases to determine payments to suppliers.OC. The increase of $16,000 will be added to purchases to determine payments to suppliersD. The increase of $16,000 will be added to net income.

Name: A2 A company uses the direct method to prepare the statement of cash f
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Description: A2 A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:End of prior yearEnd of this year$115,000$100,000520,000850,000Accounts receivableCost of goods soldSales revenue65

Cash flow is essential to financial decision-making because it provides insight into an…

Answered: Accounts receivable Cost of goods sold…

Business

Accounting

Accounts receivable Cost of goods sold year $115,000 520,000 $100,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.17E

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