Last Year Cumberland Corporation Reported a Cost of Goods Sold

Multiple Choice

Last year Cumberland Corporation reported a cost of goods sold of $120,000. Inventories increased by $35,000 during the year, and accounts payable increased by $20,000. The company uses the direct method to determine the net cash provided by (used in) operating activities on the statement of cash flows. The cost of goods sold adjusted to a cash basis would be:

A) $135,000
B) $100,000
C) $155,000
D) $105,000