Required information [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased merchandise inventory of $175,000 on account. 3. Sold merchandise for $206,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $131,500. 4. Provided a six-month warranty on the merchandise 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 $156,500 of the sales. 6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $124,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6. c-1. Prepare the income statement for Year 1. c-2. Prepare the balance sheet for Year 1. c-3. Prepare the statement of cash flows for Year 1.

Required information [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased merchandise inventory of $175,000 on account. 3. Sold merchandise for $206,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $131,500. 4. Provided a six-month warranty on the merchandise 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 $156,500 of the sales. 6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $124,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6. c-1. Prepare the income statement for Year 1. c-2. Prepare the balance sheet for Year 1. c-3. Prepare the statement of cash flows for Year 1.

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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