Exhibit 12-4
Manning Company Uses the Indirect Method to Prepare

question 11

Multiple Choice

Exhibit 12-4
Manning Company uses the indirect method to prepare the statement of cash flows.The following amounts are shown in its December 31,2017,financial statements.
$$\begin{array} { l c c } & \text { December 31, } 2017 & \text { December 31, 2016 } \\ \text { Accourts receivable } & \$ 663,000 & \$ 600,000 \\\text { Cost of goods sold } & \$ 1,800,000 & \\\text { Sales reveruse } & \$ 2,400,000 & \\\text { Accourts payable } & \$ 255,000 & \$ 195,000 \\\text { Irventory } & \$ 270,000 & \$ 375,000 \\\text { Salaries payable } & \$ 45,000 & \$ 30,000 \\\text { Salaries expense } & \$ 165,000 & \$ 144,000\end{array}$$
-Refer to Exhibit 12-4.How will the change in inventory be reported in the operating activities section of the statement of cash flows?

• A)The decrease of $105,000 will be subtracted from net income.
• B)The decrease of $105,000 will be subtracted from cost of goods sold.
• C)The decrease of $105,000 will be added to cost of goods sold.
• D)The decrease of $105,000 will be added to net income.
• E)None of the answer choices is correct.

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Definitions:

Gender Roles

Socially constructed roles, behaviors, activities, and attributes that a given society considers appropriate for men and women.

Masculine Behaviors

Actions or traits traditionally associated with or expected of men in a given culture, often emphasizing attributes such as strength, dominance, and emotional restraint.

Feminine Behaviors

Actions or conduct culturally associated with women and girls, often influenced by societal norms, expectations, and roles.

Transsexual

An individual who experiences a gender identity that is incongruent with their assigned sex at birth and may seek to transition physically and legally to the gender with which they identify.