1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $174,500 on account. 3. Sold equipment for $194,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $119,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. 5. Paid the sales tax to the state agency on $144,500 of the sales. 6. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019.
1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $174,500 on account. 3. Sold equipment for $194,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $119,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. 5. Paid the sales tax to the state agency on $144,500 of the sales. 6. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
The following transactions apply to Ozark Sales for 2018:
1. The business was started when the company received $48,500 from the issue of common stock.
2. Purchased equipment inventory of $174,500 on account.
3. Sold equipment for $194,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is
sold. The merchandise had a cost of $119,500.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount
to 3 percent of sales.
5. Paid the sales tax to the state agency on $144,500 of the sales.
6. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on
March 1, 2019.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $53,500 for the year.
9. Paid $124,600 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
c. What is the total amount of current liabilities at December 31, 2018? (Do not round intermediate calculations and round your
answer to the nearest whole dollar amount.)
Total current liabilities](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8151a55-1f97-4293-9574-706e6f6ba5ac%2F5625de9f-a51a-4093-994e-6658d1aae405%2Fe5rghdg_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
The following transactions apply to Ozark Sales for 2018:
1. The business was started when the company received $48,500 from the issue of common stock.
2. Purchased equipment inventory of $174,500 on account.
3. Sold equipment for $194,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is
sold. The merchandise had a cost of $119,500.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount
to 3 percent of sales.
5. Paid the sales tax to the state agency on $144,500 of the sales.
6. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on
March 1, 2019.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $53,500 for the year.
9. Paid $124,600 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
c. What is the total amount of current liabilities at December 31, 2018? (Do not round intermediate calculations and round your
answer to the nearest whole dollar amount.)
Total current liabilities
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