Jason Company uses the indirect method to prepare the statement of cash flows. The following amounts are shown in its December 31, 2015, financial statements.

	December 31, 2015	December 31, 2014
Accounts receivable	$221,000	$200,000
Cost of goods sold	$600,000
Sales revenue	$800,000
Accounts payable	$ 85,000	$ 65,000
Inventory	$ 90,000	$125,000
Salaries payable	$ 15,000	$ 10,000
Salaries expense	$ 55,000	$ 48,000

How will the change in inventory be reported in the operating activities section of the statement of cash flows?

The decrease of $35,000 will be added to net income.

The decrease of $35,000 will be added to cost of goods sold.

The decrease of $35,000 will be subtracted from cost of goods sold.

The decrease of $35,000 will be subtracted from net income.