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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			20X3
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:

Operating expenses include depreciation expense of $10,000

Accounts Payable related to the purchase of inventory

Equipment that cost $8,000 was sold at a loss of $2,000

New equipment was purchased during the year for $6,000

Dividends declared and paid in 20X4 totaled $2,000

Common shares were sold for $10,000 cash

Interest payable in 20X4 was $500 greater than interest payable in 20X3

What is the Accumulated Depreciation of the machinery sold when the indirect method to prepare cash flow statements is use?

Multiple Choice

$10,000

None of the other alternatives are correct

$8,000

$16,000

$2,000

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