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This problem continues a thread from Bob's Chocolate. In Bob's, we observed that the income figure is not

the same as the cash involved. The revenue is not the same as the cash received, and the expense is not the

same as the cash paid.

The figures on the income statement are the result of our system of accounting where we record events,

like wages, whether we have paid them or not. We state that we "accrue" the unpaid wages. In general, we

state that we have reconciled$/$compared$/$converted from cash to accrual.

In this problem we are given cash basis figures and some balance sheet amounts. From that we are asked to

find the income statement figures. Be aware that the question can also be asked in reverse: given income

statement figures and some balance sheet amounts, find the the cash receipts or payments.

For example, suppose Accounts Receivable $($an asset$)$ increase by $$100.$ Unearned Revenue $($a liability$)$

increases by $$75,$ and sales $($a component of retained earnings$)$ is $$1,000.$ The accounting definitional

equation must stay intact for the period, so we can imagine that the changes to both sides of the equation

must stay equal, Like this:

Cash $+$ Accounts Receivable $=$ Unearned Revenue $+$ Retained Eamings

$x+$$$100=$$$75+$$$1,000$

For the exam, you will want to be able to take the accrual information and find the cash involved, and vice

versa.

Problem statement

During August $20$XI$.$ Packer Manufacturing had the following cash receipts and disbursements:

Cash received from customers

Cash received from selling equipment

Cash paid for salaries

Cash paid to suppliers for inventory purchases

$130,000$

In addition, the folfowing batance sheet account batances were shown on Packer's books:

Assume all sales and purchases are on account.

Required

From these cash basis figures and the balance sheet amounts, find these figures for the income

statement.

Find Sales for August, $20$X$1$

Find Salary Expense for August, $20$X$1.$

Find Cost of Goods Sold for August, $20$X$1$