Eastern Corp ​
Additional Information ​
(1) Equipment with a Cost Of

question 50

Essay

Eastern Corp.
Use the following selected data and additional information from the records of Eastern Corp.to answer the questions that follow.
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$\begin{array}{lrr}\text { Bal ance Sheet Data } & \underline{\mathbf{2 0 1 8}} & \underline{\mathbf{2 0 1 7}} \\\hline \text { Accounts receivable } & \$ 36,000 & \$ 42,000 \\\text { Inventories } & 28,000 & 25,000 \\\text { Accounts payable } & 31,000 & 35,000 \\\text { Salaries payable } & 2,000 & 1,000 \\\text { Equipment } & 60,000 & 40,000 \\\text { Accumulated depreciation } & 12,000 & 16,000 \\\text { Bonds payable } & 50,000 & 100,000 \\\text { Common stock } & 150,000 & 100,000 \\\text { Retained eamings } & 38,000 & 20,000\end{array}$ ​
Additional information:
$\begin{array}{lr}\text { Income Statement Data } & \mathbf{2 0 1 8} \\\hline \text { Net sales } & \$ 420,000 \\\text { Cost of goods sold } & 300,000 \\\text { Operating expenses (excluding depreciation expense) } & 84,000 \\\text { Net income } & 30,000 \\\text { Gain on sale of equipment (included in net income above) } & 2,000\end{array}$ ​
(1) Equipment with a cost of $\$ 15,000$ and a book value of $\$ 3,000$ was sold for $\$ 5,000$ during 2018 .
(2) Common stock was issued to retire bonds payable during 2018 .
(3) The only items affecting retained eamings in 2018 were net income and dividends declared and paid. ​
-Review the data for Eastern Corp.
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Required
(A)What amount of cash was collected from customers during 2018?
(B)What is the amount paid for purchases of merchandise during 2018?
(C)What is the amount paid for operating expenses during 2018?

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Definitions:

Settlement Rate

The agreed-upon rate used to calculate the exchange of payments between counterparties in financial transactions, such as in derivatives or loans.

Pension Expense

The cost incurred by an employer to fund its defined benefit pension plan, reflecting the amount needed to cover benefits earned by employees during the period.

Plan Assets

Assets set aside to meet future obligations, typically used in pension and retirement plans.

Pension Asset

An asset on the balance sheet, representing the company's surplus or prepaid contributions in its pension fund.