Martinez Company Uses the Direct Method to Prepare Its Statement

True/False

Martinez Company uses the direct method to prepare its statement of cash flows. It has reported Cost of Goods Sold of $95,000 on its income statement for the year 2015. If the balance in the Inventory account has gone down by $6,000 during the year, then $6,000 will have to be added to $95,000 as part of the process to calculate payments to suppliers for inventory purchases.