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. 6. 1. Prepare the balance sheet for Year 1 2. Prepare the statement of cash flows for Year 1.

. 6. 1. Prepare the balance sheet for Year 1 2. Prepare the statement of cash flows for Year 1.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Balance Sheet As of December 31, Year 1 \table [[Assets,,], [Cash,, $420,280 The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $176,000 on account. Sold equipment for $204,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $129,000. Provided a six- month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. Paid the sales tax to the state agency on $154,000 of the sales. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $53,500 for the year. Paid $125,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. 1. Prepare the balance sheet for Year 12. Prepare the statement of cash flows for Year 1.
Transcribed Image Text:Balance Sheet As of December 31, Year 1 \table [[Assets,,], [Cash,, $420,280 The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $176,000 on account. Sold equipment for $204,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $129,000. Provided a six- month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. Paid the sales tax to the state agency on $154,000 of the sales. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $53,500 for the year. Paid $125,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. 1. Prepare the balance sheet for Year 12. Prepare the statement of cash flows for Year 1.
Assets Cash Merchandise inventory Total assets Liabilities Accounts payable Sales tax payable Warranty payable Interest payable Notes payable Balance Sheet As of December 31, Year 1 Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 420,280 176,000 $ 596,280 0 0 0
Transcribed Image Text:Assets Cash Merchandise inventory Total assets Liabilities Accounts payable Sales tax payable Warranty payable Interest payable Notes payable Balance Sheet As of December 31, Year 1 Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 420,280 176,000 $ 596,280 0 0 0
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