Reference no: EM132920662

The following items were reported on the balance sheets and income statements of Marshall Company:

Accounts payable, December 31, 2010               $ 42,000

Accounts payable, December 31, 2011                48,000

Operating expenses                                        286,000

                                                               286,000

Problem 1: How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

a. as a deduction from net income.

b. as a deduction from operating expenses.

c. as an addition to operating expenses.

d. as an addition to net income.