Question

Pardon Company, a retail entity makes all of its sales to customers on account and purchases 100% of its Merchandise Inventory on account from vendor, Power Company. Pardon provides you with the following selected account balances all of which are normal: 12/31/2018 12/31/2019 Accounts Receivable $32,000 $28,000 Merchandise Inventory 70,000 82,000 Prepaid Insurance Expense 6,500 5,800 Supplies 12,000 9,000 Equipment 130,000 115,000 Accumulated Depreciation 78,000 86,000 Accounts Payable- Power Company 26,000 40,000 Salaries Payable 3,200 5,400 Sales Revenue $615,000 Gain on Equipment Disposal 4,000 Cost of Goods Sold 470,000 Depreciation Expense 19,000 Insurance Expense 17,500 Salaries Expense 52,000 Supplies Expense 75,000 Consider the above account balances and consider further that during 2019 Pardon sold a single piece of equipment and did not make any new equipment purchases. What was the amount of cash collected from the sale of the equipment? A. None of the other answer choices provided are correct. B. $11,000 C. $8,000 D. $15,000 E. $19,000

Answer 1