Marquette Décor Is a Merchandiser That Operates a Small Retail

question 36

Multiple Choice

Marquette Décor is a merchandiser that operates a small retail store.Comparative balance sheets for the years ending December 31, 2018 and 2017 and its income statement for 2018 follow: $\begin{array}{lrr}&\text { December } 31\\\text { Assets }&2018&2017\\\hline \text { Cash } & \$ 35,400 & \$ 45,300 \\\text { Accounts receivable } & 11,400 & 14,500 \\\text { Merchandise inventories } & 36,500 & 34,100 \\\text { Equipment } & 90,000 & 66,000 \\\text { Accumulated depreciation } & \underline{(28,600) } & (31,400) \\\text { Total assets } & \$ 144,700 & \$ 128,500\\\\\text { Liabilities and Stockholders' Equity }\\\hline \text { Accounts payable } & \$ 14,300 & \$ 12,500 \\\text { Income taxes payable } & 4,500 & 8,800 \\\text { Long-term notes payable } & 16,500 & 23,000 \\\text { Common stock, } \$ 2 \text { par } & 88,200 & 65,300 \\\text { Retained earnings } & 21,200 & 18,900 \\ \text { Total liabilities and stockholders' equity } & \$ 144,700 & \$ 128,500 \\\\\text { Sales } & \$ 224,000 \\\text { Cost of goods sold } & 123,000 \\\text { Depreciation expense } & 14,000 \\\text { Other expenses } & 56,000 \\\text { Gain on sale of equipment } & 3,400 \\\text { Income taxes } & 16,000 \\\text { Net income } & \$ 18,400\end{array}$ During the year, equipment with an original cost of $17,000, and accumulated depreciation totaling $16,800 was sold for $3,600.Dividends were declared and paid during the year.How much cash was used to acquire new equipment during 2018?

• A)$3,600
• B)$27,600
• C)$41,000
• D)$24,000

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