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| Royce Company had the following transactions during the fiscal year ended December 31, 2005:Accounts receivable decreased from $115,000 on December 31, 2004 to $100,000 on December 31, 2005.Royce's board of directors declared dividends on December 31, 2005 of $.05 per share on the 2.8 million shares outstanding, payable to shareholders of record on January 31, 2006. The company did not declare or pay dividends for fiscal 2004.Sold a truck with a net book value of $7,000 for $5,000 cash, reporting a loss of $2,000.Paid interest to bondholders of $780,000.The cash balance was $106,000 on December 31, 2004 and $284,000 on December 31, 2005.Royce Company uses the indirect method to prepare its 2005 statement of cash flows. It reports a(n) A. Deduction of $15,000 in the operating section, representing the decrease in year-end accounts receivable. B. Addition of $2,000 in the operating section for the $2,000 loss on the sale of the truck. C. Source or inflow of funds of $5,000 from the sale of the truck in the financing section. D. Use or outflow of funds of $140,000 in the financing section, representing dividends. |