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 Cash Accounts Receivable Inventory Prepaid Expenses Equipment Accumulated Depreciation Total Assets 20x5 20X4 $ 6,450 $ 4,100 $ 72,000 $ 6,500 $110,250 $140,000 $ 1,750 $ 1,020 $ 96,000 $100,000 $(50,000) $(42,000) $236,450 $209,620 equipment Account Payable $ 16,230 $ 9,900 Account Payable Interest Payable Income taxes payable Dividends Payable Long-term Notes Payable Common shares Retained Earnings Total Liabilities & Shareholders' Equity $ 16,230 $ 9,900 $ 810 10 $ 10,800 $ 9,500 $ 1,800 $ 2,800 $ 54,500 $ 62,000 $135,000 $123,000 $ 16,310 $ 2,410 $236,450 $209,620 What is the total payment for interest when the direct method is used to prepare the cash flow statement? Multiple Choice $800 None of the other alternatives are correct $2,700 $4,300 $3,500