The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49,500 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $190,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $115,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. 5. Paid the sales tax to the state agency on $140,500 of the sales. 6. On September 1, Year 1, borrowed $19,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. 7. Paid $5,500 for warranty repairs during the year. 8. Paid operating expenses of $54,500 for the year. 9. Paid $124,400 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.
The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49,500 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $190,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $115,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. 5. Paid the sales tax to the state agency on $140,500 of the sales. 6. On September 1, Year 1, borrowed $19,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. 7. Paid $5,500 for warranty repairs during the year. 8. Paid operating expenses of $54,500 for the year. 9. Paid $124,400 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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The following transactions apply to Ozark Sales for Year 1:
1. The business was started when the company received $49,500 from the issue of common stock.
2. Purchased equipment inventory of $177,000 on account.
3. Sold equipment for $190,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $115,500.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.
5. Paid the sales tax to the state agency on $140,500 of the sales.
6. On September 1, Year 1, borrowed $19,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $54,500 for the year.
9. Paid $124,400 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Transcribed Image Text:b-2. Prepare the balance sheet for Year 1.
Note: Round your answers to the nearest dollar amount.
Assets
Cash
Merchandise inventory
Total assets
Liabilities
Accounts payable
Sales tax payable
Notes payable
Warranty payable
Interest payable
OZARK SALES
Balance Sheet
As of December 31, Year 1
Total liabilities
Stockholders' equity
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
0
0
0
$
0
Transcribed Image Text:b-3. Prepare the statement of cash flows for Year 1.
Note: Enter amounts to be deducted and cash outflows with a minus sign. Round your answers to the nearest whole dollar.
OZARK SALES
Statement of Cash Flows
For the Year Ended December 31, Year 1
Cash flows from operating activities:
Inflow from customers
Inflow from sales tax
Outflow for expenses
Outflow for sales tax
Outflow to purchase inventory
Net cash flows from operating activities
Cash flows from investing activities:
Cash flows from financing activities
Inflow from loan
Inflow from stock issue
Net cash flows from financing activities
Net change in cash
Plus: Beginning cash balance
Ending cash balance
$
0
0
0
0
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