Exhibit 12-5
Myers Inc -Refer to Exhibit 12-5

question 2

Multiple Choice

Exhibit 12-5
Myers Inc.uses the indirect method to prepare the statement of cash flows.The following amounts are shown in its December 31,2017,financial statements.
$$\begin{array} { l c c } & \text { December 31, } 2017 & \text { December 31,2016 } \\\hline\text { Accourts receivable } & \$ 442,000 & \$ 502,000 \\\text { Cost of goods sold } & \$ 1,200,000 & \\\text { Sales reveruse } & \$ 1,600,000 & \\\text { Accourts payable } & \$ 170,000 & \$ 210,000 \\\text { Irventory } & \$ 180,000 & \$ 130,000 \\\text { Salaries payable } & \$ 30,000 & \$ 38,000 \\\text { Salaries expense } & \$ 110,000 & \$ 96,000\end{array}$$
-Refer to Exhibit 12-5.How will the change in accounts payable be reported in the operating activities section of the statement of cash flows?

• A)The decrease of $40,000 will be subtracted from net income.
• B)The decrease of $40,000 will be subtracted from sales revenue.
• C)The decrease of $40,000 will be added to sales revenue.
• D)The decrease of $40,000 will be added to net income.
• E)None of the answer choices is correct.

---

Definitions:

Altered Check

A check on which information has been modified or forged, such as the payee's name or the amount, without the account holder's authorization.

Ethos Art Gallery

Refers to a hypothetical or specific art gallery that presents and promotes artworks reflecting particular cultural values and ideals.

Notice of Dishonor

A formal notification given to parties involved that a negotiable instrument, like a check, has been dishonored or refused for payment.

Big Bank

A term often used to refer to the largest banks in a particular region or country, which have a significant impact on the overall banking and financial system.