The following transactions apply to Ozark Sales for 2018: 1. The business was started when the company received $49,000 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $133,000. 4. Provided a six-month warranty on the equipment 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 $158,000 of the sales. 6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (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.)
The following transactions apply to Ozark Sales for 2018: 1. The business was started when the company received $49,000 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $133,000. 4. Provided a six-month warranty on the equipment 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 $158,000 of the sales. 6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (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.)
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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I am also having trouble on question 10. I am getting -1,290, but it is showing that this number incorrect.
Transcribed Image Text:The following transactions apply to Ozark Sales for 2018:
1. The business was started when the company received $49,000 from the issue of common stock.
2. Purchased equipment inventory of $177,000 on account.
3. Sold equipment for $208,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is
sold. The merchandise had a cost of $133,000.
4. Provided a six-month warranty on the equipment 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 $158,000 of the sales.
6. On September 1, 2018, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on
March 1, 2019.
7. Paid $5,700 for warranty repairs during the year.
8. Paid operating expenses of $55,000 for the year.
9. Paid $125,000 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Required
a. Record the given transactions in a horizontal statements model like the following one. (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.)
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