The Following Balance Sheets Are Provided for Socrates Foods:
A

question 128

Essay

The following balance sheets are provided for Socrates Foods:
a. Compute the following:
(1) Cash received from customers during the year $__________
(2) Cash payments for merchandise during the year $__________
(3) Wages paid to employees during the year $__________
(4) In Socrates Foods' statement of cash flows, what amount would be reported as the net change in cash and cash equivalents? $__________ (increase/decrease)
b. Socrates Foods recorded the sale of equipment as follows:
How would this transaction be reported in Socrates Foods' statement of cash flows? (Assume the direct method is being used.)
$\begin{array}{lcc}&\text { End of } & \text { Beginning } \\&\text { Year }&\text {of Year }\\ \text { Cash and cash equivalents } & \$ 170,000 & \$ 120,000 \\ \text { Accounts receivable.}& 80,000 & 65,000 \\ \text {Inventory} & 140,000 & 130,000 \\\text {Plant and equipment (net)} & 130,000 & 80,000 \\ \text { Total assets } & \$ 520,000 & \$ 39 \\\text {Accounts payable (for merchandise).}&\$ 65,000 & \$ 35,000 \\\text {Wages payable}&120,000 & 110,000 \\\text {Long-term liabilities}&95,000 & 70,000 \\\text {Common stock}&100,000 & 100,000 \\\text {Retained earnings.}&140,000 & 80,000 \\ \$ 520,000 & \$ 395,000 \\\text {Total liabilities and owners' equity}&\end{array}$

$\text { Selected information from Socrates Foods' current year income statement: }$

$\begin{array}{lrr} \text { Sales } &&\$1,650,000\\ \text {Cost of goods sold. } &&840,000\\ \text {Wages expense. }& &260,000\end{array}$
$\begin{array}{lcc}\text { Cash } & 25,000 \\\text { Accumulated Depreciation: Equipment } & 20,000 \\\text { Loss on Disposal of Equipment } & 15,000\\\text { Equipment. }&&60,000\end{array}$

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Definitions:

Instrument

A formal legal document that evidences an agreement, right, or obligation, such as a contract, will, promissory note, or share certificate.

Treasurer Liability

The financial responsibilities borne by the treasurer of an organization, including managing funds and financial risk.

Warranties

Legally binding promises or guarantees about the state or quality of a product or service, provided by the seller.

Presentment

The act of formally presenting a document, such as a check or bill of exchange, for acceptance or payment.