The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $50,000 from the issue of common stock. Purchased equipment inventory of $178,000 on account. Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. Paid the sales tax to the state agency on $142,000 of the sales. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $56,000 for the year. Paid $124,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Record the given transactions in a horizontal statements model. Prepare the income statement, balance sheet, and statement of cash flows for Year 1. What is the total amount of current liabilities at December 31, Year 1?
The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $50,000 from the issue of common stock. Purchased equipment inventory of $178,000 on account. Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. Paid the sales tax to the state agency on $142,000 of the sales. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $56,000 for the year. Paid $124,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Record the given transactions in a horizontal statements model. Prepare the income statement, balance sheet, and statement of cash flows for Year 1. What is the total amount of current liabilities at December 31, Year 1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following transactions apply to Ozark Sales for Year 1:
- The business was started when the company received $50,000 from the issue of common stock.
- Purchased equipment inventory of $178,000 on account.
- Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000.
- Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales.
- Paid the sales tax to the state agency on $142,000 of the sales.
- On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2.
- Paid $5,900 for warranty repairs during the year.
- Paid operating expenses of $56,000 for the year.
- Paid $124,000 of accounts payable.
- Recorded accrued interest on the note issued in transaction no. 6.
Required
- Record the given transactions in a horizontal statements model.
- Prepare the income statement, balance sheet, and statement of
cash flows for Year 1. - What is the total amount of current liabilities at December 31, Year 1?
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req B Inc
Stmt
Req B Bal
Req A
Req B Stmt
Cash Flows
Sheet
Prepare the income statement for Year 1. (Round your answers to the nearest whole dollar.)
Expenses
OZARK SALES
Income Statement
For the Year Ended December 31, Year 1
Total operating expenses
< Req A
Req C
Req B Bal Sheet >
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