Last year Anderson Corporation reported a cost of goods sold of $105,000. The company's inventory at the beginning of the year was $12,000, and its inventory at the end of the year was $20,500. The prepaid expense account increased by $2500 between the beginning and end of the year, and the accounts payable account decreased by $4500. Cost of goods sold adjusted to the cash basis under the direct method would be:
A. $98,000
B. $112,000
C. $116,000
D. $118,000
Answer: D
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