A company uses the indirect method to prepare the statement of cash flows. It presents the following data on its financial statements:
End of this year End of prior year
Accounts receivable $115,000 $100,000
Cost of goods sold 560,000
Sales revenue 830,000
Accounts payable* 75,000 67,000
Inventory 86,000 105,000
Salary payable 13,000 10,000
Salary expense 49,000 45,000
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to salary payable?
A) The decrease of $3,000 will be subtracted from cost of goods sold.
B) The decrease of $3,000 will be added to cost of goods sold.
C) The decrease of $3,000 will be added to net income.
D) The decrease of $3,000 will be subtracted from net income.