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 $175,000 on account. Sold equipment for $191,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,000. 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 $141,000 of the sales. On September 1, Year 1, borrowed $21,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $52,000 for the year. Paid $124,900 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Exercise 9-8A (Algo) Part b b-2. Prepare the balance sheet for Year 1. Note: Round your answers to the nearest dollar amount.
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 $175,000 on account. Sold equipment for $191,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,000. 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 $141,000 of the sales. On September 1, Year 1, borrowed $21,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $52,000 for the year. Paid $124,900 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Exercise 9-8A (Algo) Part b b-2. Prepare the balance sheet for Year 1. Note: Round your answers to the nearest dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $175,000 on account.
Sold equipment for $191,000 cash (not including sales tax). Sales tax of 7 percent is collected when the
merchandise is sold. The merchandise had a cost of $116,000.
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 $141,000 of the sales.
On September 1, Year 1, borrowed $21,000 from the local bank. The note had a 7 percent interest rate
and matured on March 1, Year 2.
Paid $5,900 for warranty repairs during the year.
Paid operating expenses of $52,000 for the year.
Paid $124,900 of accounts payable.
Recorded accrued interest on the note issued in transaction no. 6.
Exercise 9-8A (Algo) Part b
b-2. Prepare the balance sheet for Year 1.
Note: Round your answers to the nearest dollar amount.
Transcribed Image Text:b-2. Prepare the balance sheet for Year 1.
Note: Round your answers to the nearest dollar amount.
OZARK SALES
Balance Sheet
As of December 31, Year 1
Assets
Cash
Merchandise inventory
Total assets
Liabilities
Accounts payable
Sales tax payable
Notes payable
Warranty payable
Interest payable
Total liabilities
Stockholders' equity
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
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
$0
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.
Net cash flows from financing activities
Net change in cash
Plus: Beginning cash balance
Ending cash balance.
0
0
$0
$0
0
0
$0
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