The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock.Purchased equipment inventory of $175,500 on account.Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500.Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.Paid the sales tax to the state agency on $143,500 of the sales.On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2.Paid $5,500 for warranty repairs during the year.Paid operating expenses of $54,000 for the year.Paid $124,400 of accounts payable.Recorded accrued interest on the note issued in transaction no. 6. RequiredRecord 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? Req B StmtCash FlowsPrepare the income statement for Year 1. (Round your answers to the nearest whole dollar.)Req AReq B IncStmtExpensesReq B BalSheetOZARK SALESIncome StatementFor the Year Ended December 31, Year 1Total operating expensesXXXXXX< Req A0XReq CReq B Bal Sheet >*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. Req AEventNo.1.2.3a.3b.4.5.6.7.8.9.10.Bal.Req B IncStmtRecord the given transactions in a horizontal statements model. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), ora financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate calculations and round your answers to the nearest whole dollar amounts. Not all cells will require entry.)Cash0XAssetsx +XXXXX+++++X +X +X +X +X ++Req B BalSheet+MerchandiseInventoryReq B StmtCash Flows0==X ==X =========AccountsPayableReq C0++X ++++++++X +++SalesTaxPayable0XBalance SheetLiabilities+++++X +++++++WarrantyPayable0+++++X +++X+++++OZARK SALESHorizontal Statements ModelInterestPayable0+< Req A++++++++++X ++NotesPayable0++++++++X ++++++Stockholders' EquityCommonStock0Req B Inc Stmt >+X ++++++++++++RetainedEarnings0XXXXXRevenue0XIncome StatementExpense0===X =X====X =X ==NetIncome0XXXXXStatement of Cash Flows0XxShow lessXXXXXXXXXXXX

Current liabilities is shown in the balance sheet and the firm is responsible to pay all these…

Answered: The following transactions apply to…

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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Question

The following transactions apply to Ozark Sales for Year 1:

The business was started when the company received $48,000 from the issue of common stock.
Purchased equipment inventory of $175,500 on account.
Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500.
Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.
Paid the sales tax to the state agency on $143,500 of the sales.
On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2.
Paid $5,500 for warranty repairs during the year.
Paid operating expenses of $54,000 for the year.
Paid $124,400 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?

Req B Stmt
Cash Flows
Prepare the income statement for Year 1. (Round your answers to the nearest whole dollar.)
Req A
Req B Inc
Stmt
Expenses
Req B Bal
Sheet
OZARK SALES
Income Statement
For the Year Ended December 31, Year 1
Total operating expenses
X
X
X
X
X
X
< Req A
0
X
Req C
Req B Bal Sheet >
*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

Req A
Event
No.
1.
2.
3a.
3b.
4.
5.
6.
7.
8.
9.
10.
Bal.
Req B Inc
Stmt
Record the given transactions in a horizontal statements model. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or
a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate calculations and round your answers to the nearest whole dollar amounts. Not all cells will require entry.)
Cash
0
X
Assets
x +
XXXXX
+
+
+
+
+
X +
X +
X +
X +
X +
+
Req B Bal
Sheet
+
Merchandise
Inventory
Req B Stmt
Cash Flows
0
=
=
X =
=
X =
=
=
=
=
=
=
=
=
Accounts
Payable
Req C
0
+
+
X +
+
+
+
+
+
+
+
X +
+
+
Sales
Tax
Payable
0
X
Balance Sheet
Liabilities
+
+
+
+
+
X +
+
+
+
+
+
+
Warranty
Payable
0
+
+
+
+
+
X +
+
+
X+
+
+
+
+
OZARK SALES
Horizontal Statements Model
Interest
Payable
0
+
< Req A
+
+
+
+
+
+
+
+
+
+
X +
+
Notes
Payable
0
+
+
+
+
+
+
+
+
X +
+
+
+
+
+
Stockholders' Equity
Common
Stock
0
Req B Inc Stmt >
+
X +
+
+
+
+
+
+
+
+
+
+
+
Retained
Earnings
0
X
X
X
X
X
Revenue
0
X
Income Statement
Expense
0
=
=
=
X =
X
=
=
=
=
X =
X =
=
Net
Income
0
X
X
X
X
X
Statement of Cash Flows
0
X
x
Show less
X
X
X
X
X
X
X
XXXXX

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