Last Year, Knox Corporation Reported on Its Income Statement Sales

Multiple Choice

Last year, Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000. During the year, the balance in accounts receivable increased $30,000, the balance in accounts payable decreased $25,000, and the balance in inventory increased $10,000. The company uses the direct method to determine the net cash provided by operating activities on its statement of cash flows. Under the direct method, cost of goods sold adjusted to a cash basis would be:

A) $105,000
B) $125,000
C) $175,000
D) $155,000