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 year End of this year $115,000 $100,000 520,000 850,000 Accounts receivable Cost of goods sold Sales revenue Accounts payable* 81,000 Inventory 92,000 Salary payable 15,500 Salary expense 50,000 Relates solely to the acquisition of inventory What will appear in the operating activities section related to accounts payable? 65,000 110,000 12.000 44,000 OA. 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 suppliers D The increase of $16,000 will be added to net income.

A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: What 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. C. The increase of $16,000 will be added to purchases to determine payments to suppliers D. The increase of $16,000 will be added to net income