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The following transactions apply to Ozark Sales for Year 1 1. The business was started when the company received $49.000 from the issue of common stock. 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5.700 for warranty repairs during the year, 8. Paid operating expenses of $55,000 for the year 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6.

The following transactions apply to Ozark Sales for Year 1 1. The business was started when the company received $49.000 from the issue of common stock. 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5.700 for warranty repairs during the year, 8. Paid operating expenses of $55,000 for the year 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6.

FINANCIAL ACCOUNTING
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 transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49.000 from the issue of common stock. 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5,700 for warranty repairs during the year, 8. Pald operating expenses of $55,000 for the year. 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6.
Transcribed Image Text:The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49.000 from the issue of common stock. 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5,700 for warranty repairs during the year, 8. Pald operating expenses of $55,000 for the year. 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6.
D Mc Graw The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49,000 from the issue of common stock 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5,700 for warranty repairs during the year 8. Paid operating expenses of $55,000 for the year. 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6 Required a. Show the effect of these transactions on the financial statements using a horizontal statements model. The first transaction is recorded as an example (Use for increase, - for decrease, and leave blank for not affected. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or not affected leave blank).) Event 1 2 34 30. Assots • M N M Balance Sheet Liabilities . Horizontal Statements Model - Stockholders' Equity Revenue Income Statement Expenses Net Income 4 + Statement of Cash Flows FA
Transcribed Image Text:D Mc Graw The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49,000 from the issue of common stock 2. Purchased merchandise inventory of $177,000 on account. 3. Sold merchandise for $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500. 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 $141,500 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 $5,700 for warranty repairs during the year 8. Paid operating expenses of $55,000 for the year. 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6 Required a. Show the effect of these transactions on the financial statements using a horizontal statements model. The first transaction is recorded as an example (Use for increase, - for decrease, and leave blank for not affected. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or not affected leave blank).) Event 1 2 34 30. Assots • M N M Balance Sheet Liabilities . Horizontal Statements Model - Stockholders' Equity Revenue Income Statement Expenses Net Income 4 + Statement of Cash Flows FA
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