Question

Required information Exercise 9-8A Current liabilities LO 9-1, 9-2, 9.4 [The following information applies to the questions displayed below.) The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50.000 from the issue of common stock 2. Purchased equipment inventory of $380,000 on account. 3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. 5. Paid the sales tax to the state agency on $400,000 of the sales. 6. On September 1, Year 1, borrowed $50.000 from the local bank. The note had a 4 percent interest rate and matured on March 1 Year 2 7. Paid $6,200 for warranty repairs during the year. 8. Pald operating expenses of $78,000 for the year. 9. Paid $250,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.

Answer 1

510,000 330,000 180,000 OZARK SALES Income statement For the Year Ended December 31, Year 1 Sales revenue cost of good sold Gross Margin Expense Warranty expense Operating expenses Total Operating Expenses Operating income Interest expense Net income OZARK SALES Balance Sheet As of December 31, Year 1 Assets Cash Merchandise inventory Total Assets 284,600 50,000 334,600 OZARK SALES Statement of Cash Flows For the Year Ended December 31, Year 1 Cash Flows From Operating Activities: Inflow from customers Outflow for expenses (6200+78000) Outflow for sales tax Inflow from sales tax Outflow for inventory Cash Flows From Operating Activities Cash Flows From Investing Activities Cash Flows From Fin. Activities: Inflow from stock issue Inflow from loan Net Cash Flow from Financing Act. 510,000 -84,200 -32000 40800 -250,000 10,200 78,000 184,600 88,200 91,800 Liabilities Accounts payable Sales tax payable Warranties payable Notes payable Interest payable Total Liabilities 130,000 8,800 4,000 50.0001 667 | 91,1331 50000 50,000 667 193,467 100,000 284,600 Stockholders' Equity Common stock Retained earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 50,000 91,133 Net Change in Cash Plus: Beginning Cash Balance - Ending Cash Balance 284,600 141,133 334,600 + Sheet63 Sheet64S heet65 Sheet66 Sheet67 Sheet68 Sheet69 Sheet70 Sheet71 Sheet72 il ENG US 10:28 06/11/2019

working: Event Cash بيا | احلام | ادا Assets Liabilities Equity +Iny = A/ P s ales tax payable warranty payable Interest payable Note payable = CommonStock | + | Ret. Ear. 50000 50000 380000 380000 550,800 40800 510000 Sales -330000 -330000 COGS 10,200 -10,200 Warranty expense -32000 -32000 50,000 50,000 -6,200 -6,200 -78,000 -78,000 Operating expenses -250,000 -250,000 -667 Interest expense 284,600 + 50,000 130,000 8,800 4,000 667 50,000/= 50,000+ 91,133 9 10 Total Working: Adj 3 Sales tax 510000*8% Adj 4 5100000*2% Adj 5 400000*8% Adj 10 50000*4%*4/12 40800 10200 32000 667 Sheet63 Sheet64 Sheet65 Sheet66 Sheet67 Sheet68 Sheet69 Sheet70 Sheet71 Sheet72 III US 06/11/2019