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 $49,000 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $133,000. 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 $158,000 of the sales. 6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate
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 $49,000 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $133,000. 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 $158,000 of the sales. 6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I just need help on questions 5. I am decreasing cash, sales tax payable, and statement of
![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 $49,000 from the issue of common stock.
2. Purchased equipment inventory of $177,000 on account.
3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $133,000.
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 $158,000 of the sales.
6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on
March 1, 2019.
7. Paid $5,700 for warranty repairs during the year.
8. Paid operating expenses of $55,000 for the year.
9. Paid $125,000 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Required
a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances
and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an
investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5a6d84a-4bf0-4070-8e39-a4f6866c2f9d%2F671478a5-5cf6-4c10-9876-e5262351c021%2Ffpwguq.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 $49,000 from the issue of common stock.
2. Purchased equipment inventory of $177,000 on account.
3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $133,000.
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 $158,000 of the sales.
6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on
March 1, 2019.
7. Paid $5,700 for warranty repairs during the year.
8. Paid operating expenses of $55,000 for the year.
9. Paid $125,000 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Required
a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances
and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an
investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate
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