The business was started when the company received $48,500 from the issue of common stock. Purchased equipment inventory of $177,000 on account. Sold equipment for $196,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $121,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. Paid the sales tax to the state agency on $146,500 of the sales. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, 2019. Paid $6,000 for warranty repairs during the year. Paid operating expenses of $54,500 for the year. Paid $125,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Prepare the income statement, balance sheet, and statement of cash flows for 2018.
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The business was started when the company received $48,500 from the issue of common stock.
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Purchased equipment inventory of $177,000 on account.
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Sold equipment for $196,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $121,500.
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Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales.
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Paid the sales tax to the state agency on $146,500 of the sales.
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On September 1, 2018, borrowed $21,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, 2019.
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Paid $6,000 for warranty repairs during the year.
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Paid operating expenses of $54,500 for the year.
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Paid $125,400 of accounts payable.
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Recorded accrued interest on the note issued in transaction no. 6.
Prepare the income statement,
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