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Avatar Company Uses the Indirect Method to Prepare the Statement

question 27

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Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
20142013 Increase/decrease  Accounts payable $4,000$6,000$(2,000) Accrued liabilities 2,0001,0001,000 Long-term notes payable 84,00090,000(6,000) Total liabilities $90,000$97,000$(7,000)\begin{array} { | l | r | r | r | } \hline&2014 & 2013 & \text { Increase/decrease }\\\hline \text { Accounts payable } & \$ 4,000 & \$ 6,000 & \$ ( 2,000 ) \\\hline \text { Accrued liabilities } & 2,000 & 1,000 & 1,000 \\\hline \text { Long-term notes payable } & 84,000 & 90,000 & ( 6,000 ) \\\hline \text { Total liabilities } & \$ 90,000 & \$ 97,000 & \$ ( 7,000 ) \\\hline\end{array}
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The change in accrued liabilities will be shown as a positive cash flow in the adjustments to Net income.

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