Freemont Company's Account Receivable decrease by 4,000 and its Income Taxes Payable increased by 3,000 during the year. What is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?
1) Increase Account Receivable by 4,000 and decrease Income Taxes Payable by 3,000
2) Decrease Account Receivable by 4,000 and increase Income Taxes Payable by 3,000
3) Increase Account Receivable by 3,000 and decrease Income Taxes Payable by 4,000
4) Decrease Account Receivable by 3,000 and increase Income Taxes Payable by 4,000