Seaforce Manufacturing Inc.
Income Statement
Year Ended December 31, 20X5
Sale			$	340,000
Cost of goods sold			$	250,100
Gross Profit			$	89,900
Operating Expenses	$	55,000
Loss on Sale of equipment	$	2,500	$	57,500
Profit from Operations			$	32,400
Other expenses
Interest Expense			$	3,500
Profit before Income Tax			$	28,900
Income Tax Expense			$	12,000
Profit			$	16,900

Additional Information:

1. Operating expenses include depreciation expense of $10,000
2. Accounts Payable related to the purchase of inventory
3. Equipment that cost $12,500 was sold at a loss of $2,500
4. New equipment was purchased during the year for $8,500
5. Dividends declared and paid in 20X5 totaled $3,000
6. Common shares were sold for $12,000 cash
7. Interest payable in 20X5 was $800 greater than interest payable in 20X4
8. The company uses IFRS and do not treat dividends as part of operations

Seaforce Manufacturing Inc. comparative balance sheet at December 31 20X5

	20X5			20X4
Cash	$	6,450		$	4,100
Accounts Receivable	$	72,000		$	6,500
Inventory	$	110,250		$	140,000
Prepaid Expenses	$	1,750		$	1,020
Equipment	$	96,000		$	100,000
Accumulated Depreciation - equipment	$	(50,000	)	$	(42,000	)
Total Assets	$	236,450		$	209,620
Account Payable	$	16,230		$	9,900
Interest Payable	$	810		$	10
Income taxes payable	$	10,800		$	9,500
Dividends Payable	$	1,800		$	2,800
Long-term Notes Payable	$	54,500		$	62,000
Common shares	$	135,000		$	123,000
Retained Earnings	$	16,310		$	2,410
Total Liabilities & Shareholders' Equity	$	236,450		$	209,620

What was the total payment of Cash Dividends when the direct method is used to prepare the cash flow statement?

Multiple Choice

• $4,000

• $1,000

• $1,800

• None of the other alternatives are correct

• $3,000