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ABC Company uses the Direct method to prepare its statement of cash flows. Presented below are selected items from its financial statements.
| | 12/31/Yr 3 | 12/31/Yr 2 |
| Accounts receivable | $89,000 | $56,000 |
| Prepaid insurance | $2,800 | $4,600 |
| Wages payable | $9,500 | $12,000 |
| Interest payable | $12,000 | $8,900 |
| Sales revenue | $860,000 | |
| Cost of goods sold | $495,000 | |
| Wages expense | $110,000 | |
| Insurance expense | $13,200 | |
| Interest expense | $19,000 | |
Which of the following would be shown in the Operating Activities section related to insurance?
| | A. | Cash paid for insurance of $15,000 |
| | B. | $1,800 would be subtracted from net income |
| | C. | $1,800 would be added to net income |
| | D. | Cash paid for insurance of $11,400 |
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