The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30. Customers returned merchandise to Ozark five days after the purchase. The merchandise had been sold for a price of $1,520. The merchandise had cost Ozark $920. All customers paid their accounts within the discount period. Selling and administrative expenses amounted to $4,200. Interest expense paid amounted to $360. Land that had cost $8,000 was sold for $9,250 cash. Requireda. Determine the amount of net sales. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) b. Prepare a multistep income statement. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Amounts to be deducted and losses should be indicated with a minus sign.) c. Where would the interest expense be shown on the statement of cash flows? Operating activities Investing activities Financing activities d. How would the sale of the land be shown on the statement of cash flows? The full sales price of the land, $9,250, would be shown as a cash inflow from financing activities on the statement of cash flows. The full sales price of the land, $9,250, would be shown as a cash inflow from investing activities on the statement of cash flows. The full sales price of the land, $9,250, would be shown as a cash inflow from operating activities on the statement of cash flows

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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The following information was drawn from the Year 1 accounting records of Ozark Merchandisers:

Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30.
Customers returned merchandise to Ozark five days after the purchase. The merchandise had been sold for a price of $1,520. The merchandise had cost Ozark $920.
All customers paid their accounts within the discount period.
Selling and administrative expenses amounted to $4,200.
Interest expense paid amounted to $360.
Land that had cost $8,000 was sold for $9,250 cash.

Required
a. Determine the amount of net sales. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

b. Prepare a multistep income statement. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Amounts to be deducted and losses should be indicated with a minus sign.)

c. Where would the interest expense be shown on the statement of cash flows?

Operating activities
Investing activities
Financing activities

d. How would the sale of the land be shown on the statement of cash flows?

The full sales price of the land, $9,250, would be shown as a cash inflow from financing activities on the statement of cash flows.
The full sales price of the land, $9,250, would be shown as a cash inflow from investing activities on the statement of cash flows.
The full sales price of the land, $9,250, would be shown as a cash inflow from operating activities on the statement of cash flows

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