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 equipment inventory of $380,000 on account. 3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. 5. Paid the sales tax to the state agency on $400,000 of the sales. 6. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2. 7. Paid $6 200 for warranty renairs during the vear
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 equipment inventory of $380,000 on account. 3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. 5. Paid the sales tax to the state agency on $400,000 of the sales. 6. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2. 7. Paid $6 200 for warranty renairs during the vear
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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 equipment inventory of $380,000 on account.
3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The
merchandise had a cost of $330,000.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent
of sales.
5. Paid the sales tax to the state agency on $400,000 of the sales.
6. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1,
Year 2.
7. Paid $6 200 for warranty renairs during the vear
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