16. Use the following selected data and additional information from the records of XYZ Corp. to answer the questions that follow.

Balance Sheet Data	2019	2018
Accounts receivable	$ 36,000	$ 42,000
Inventories	28,000	25,000
Accounts payable	31,000	35,000
Salaries payable	2,000	1,000
Equipment	60,000	40,000
Accumulated depreciation	12,000	16,000
Bonds payable	50,000	100,000
Common stock	150,000	100,000
Retained earnings	38,000	20,000

Income Statement Data	2019
Net sales	$420,000
Cost of goods sold	300,000
Operating expenses (excluding depreciation expense)	84,000
Net income	30,000
Gain on sale of equipment (included in net income above)	2,000

Additional information:

(1)	The Equipment account: Sold equipment for $5,000 cash that resulted in a gain on sale of $2,000. This equipment was originally purchased with a cost of $15,000. In addition to the sale new equipment was also purchased for $35,000. These are the only changes to the equipment account.
(2)	Common stock was issued during 2019.
(3)	The only items affecting retained earnings in 2019 were net income and dividends declared and paid.

(4) Bonds were retired during 2019.

(5) Depreciation expense for the year was 8,000.