The following balance sheets are provided for Socrates Foods | ||||
| End of Year | Beginning of Year | ||
Cash and cash equivalents | $170,000 | $120,000 | ||
Accounts receivable | 80,000 | 65,000 | ||
Inventory | 140,000 | 130,000 | ||
Plant and equipment (net) | 130,000 | 80,000 | ||
| Total assets | $520,000 | $395,000 | |
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Accounts payable (for merchandise) | $ 65,000 | $ 35,000 | ||
Wages payable | 120,000 | 110,000 | ||
Long‑term liabilities | 95,000 | 70,000 | ||
Common stock | 100,000 | 100,000 | ||
Retained earnings | 140,000 | 80,000 | ||
| Total liabilities and owners’ equity | $520,000 | $395,000 | |
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Selected information from Socrates Foods’s current year income statement: | ||||
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Sales |
| $1,650,000 | ||
Cost of goods sold |
| 840,000 | ||
Wages expense |
| 260,000 | ||
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Socrates Foods recorded the sale of equipment as follows:
Cash | 25,000 |
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Accumulated Depreciation: Equipment | 20,000 |
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Loss on Disposal of Equipment | 15,000 |
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| Equipment |
| 60,000 |
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How would this transaction be reported in Socrates Foods’s statement of cash flows? (Assume the direct method is being used.)
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