ABC Manufacturing Inc.
	Income Statement
	Year Ended December 31, 20X4
Sale		200,000
Cost of goods sold		120,000
Gross Profit		80,000
Operating Expenses	40,000
Loss on Sale of equipment	2,000	42,000
Profit from Operations		38,000
Other expenses
Interest Expense		2,000
Profit before Income Tax		36,000
Income Tax Expense		8,000
Profit		28,000

ABC Manufacturing Inc. comparative balance sheet at December 31

	20X4	20X
Cash	4,500	4,300
Accounts Receivable	72,000	6,500
Inventory	110,000	140,000
Prepaid Expenses	1,550	1,020
Equipment	98,000	100,000
Accumulated Depreciation - equipment	(50,000)	(42,000)
Total Assets	236,050	209,820
Account Payable	15,330	9,900
Interest Payable	510	10
Income taxes payable	10,800	9,500
Dividends Payable	1,800	3,800
Long-term Notes Payable	50,000	65,000
Common shares	130,000	120,000
Retained Earnings	27,610	1,610
Total Liabilities & Shareholders' Equity	236,050	209,820

Additional Information:

1. Operating expenses include depreciation expense of $10,000
2. Accounts Payable related to the purchase of inventory
3. Equipment that cost $8,000 was sold at a loss of $2,000
4. New equipment was purchased during the year for $6,000
5. Dividends declared and paid in 20X4 totaled $2,000
6. Common shares were sold for $10,000 cash
7. Interest payable in 20X4 was $500 greater than interest payable in 20X3

What is the total Cash Payments for operating expenses when the direct method to prepare cash flow statements is use? ____

Multiple Choice

• $30,530
• $50,000
• $10,000
• $30,000
• None of the other alternatives are correct