The following transactions apply to Ozark Sales for Year 1: . The business was started when the company received $49,000 from the issue of common stock. . Purchased equipment inventory of $177,000 on account. . Sold equipment for $194,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $119,500. . Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. Paid the sales tax to the state agency on $144,500 of the sales. . On September 1, Year 1, borrowed $21,500 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 $125,100 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 $49,000 from the issue of common stock. . Purchased equipment inventory of $177,000 on account. . Sold equipment for $194,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $119,500. . Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. Paid the sales tax to the state agency on $144,500 of the sales. . On September 1, Year 1, borrowed $21,500 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 $125,100 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?
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 8PB: Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following...
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Reg B Bal
Sheet
Reg B Inc
Reg B Stmt
Reg A
Req A
Reg C
Stmt
Cash Flows
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,
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
OZARK SALES
Horizontal Statements Model
Balance Sheet
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Liabilities
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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 equipment inventory of $177,000 on account.
3. Sold equipment for $194,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The
merchandise had a cost of $119,500.
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 $144,500 of the sales.
6. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year
2.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $54,000 for the year.
9. Paid $125,100 of accounts payable.
O. Recorded accrued interest on the note issued in transaction no. 6.
Required
a. Record the given transactions in a horizontal statements model.
b. Prepare the income statement, balance sheet, and statement of cash flows for Year 1.
c. What is the total amount of current liabilities at December 31, Year 1?
Expert Solution
Step 1
Balance Sheet: It shows the financial position of an entity. It also shows whether an entity have sufficient assets to pay its liabilities. Any user can use the financial statement to take decision whether to invest or not.
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