Lumos Pet Supplies Had the Following Transactions During December 2019

Multiple Choice

Lumos Pet Supplies had the following transactions during December 2019:
•Paid a note of $34,000, owed since March, plus $850 for interest.
•Sold $73,050 of merchandise to customers on account. Cost of goods sold was $42,500.
[Hint: Cost of goods sold is an expense related to the reduction of inventory (merchandise sold) .]
•Paid accounts payable of $4,100.
As a result of these transactions, at year-end, liabilities and stockholders' equity would show a combined total:

A) Decrease by $ 9,600
B) Increase by $ 26,850
C) Decrease by $ 9,150
D) Decrease by $ 8,400