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The following Income Statement and account balance changes apply to questions 7-10: Income Statement for the year: Sales $ 400,000 Cost of Goods Sold 150,000 Gross Profit S 250.000 Operating Expenses 75,000 Net Income before Taxes S 175.000 Taxes 15,000 Net Income $ 160,000 Account Balance Changes during the year: Inventory increase $25,000 Accounts Payable decrease $10,000 Accounts Receivable decrease $40,000 Depreciation increase $ 5,000 Prepaid expenses increase $20,000 Accrued liabilities (e.g., Wages Payable) increase $10,000 Taxes Payable increase $ 4,000 What was the amount of cash payments made during the year for inventory purchases, using the direct a. $ 85,000 c. $185,000 b. $135,000 d. $165,000 7 7. What was the amount of cash payments made during the year for inventory purchases, using the direct a. S 85,000 c. $185,000 b. $135,000 d. $165,000 8. What was the amount of cash payments for taxes this year, using the direct method? a. $11,000 C. $19,000 b. $4,000 d. $15,000 9. What was the amount of cash payments for operating expenses this year, using the direct method? a. $70,000 c. $100,000 b. $60,000 d. $80,000 10. What were cash receipts from sales for the year, using the direct method? a. $360,000 c. $400,000 b. $440,000 d. $40,000

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