Question

Beg. Bal. Cash 0 49,5001 0 Required information Merchandise Inventory Beg. Bal. OF | 175,5001 0 End. Bal. 175,500 [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for Year 1: End. Bal. 49,500 Sales Tax Payable 0 Beg. Bal. Accounts Payable Beg. Bal. | 175,500 2. Ol 0 End. Bal. 175,500 0 0 End. Bal. Interest Payable 1. The business was started when the company received $49,500 from the issue of common stock. 2. Purchased equipment inventory of $175,500 on account 3. Sold equipment for $199,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. 5. Paid the sales tax to the state agency on $149,500 of the sales. 6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $55,000 for the year. 9. Paid $125,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Warranties Payable Beg. Bal. Beg. Bal. 10 OP End. Bal. End. Bal. Notes Payable Beg. Bal. Beg. Bal. Common Stock of 0 49,500 (1. 01 01 49,500 End. Bal. End. Bal. Sales Revenue b. Prepare the journal entries for the preceding transactions and post them to the appropriate T-accounts. (Round your answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Beg. Bal. Cost of Goods Sold Beg. Bal. 0 0 01 0 0 End. Bal. 01 02 End. Bal. View transaction list View journal entry worksheet Other Operating expense Beg. Bal. Warranty Expense Beg. Bal. No Credit Event 01 General Journal Cash Common stock Debit 49,500 1 O 49,500 End. Bal. End. Bal. 2T 02 Interest Expense 175,500 Merchandise inventory Accounts payable 175,500 Beg. Bal. 10. ol End. Bal. What is the journal entry for each transaction and what does it look like on the T-accounts?

Answer 1

29 30 (1) Cash $ 49500 Common stock $49500 3 Inventory $175500 Accounts payable $175500 3) Cash $215460 Sales $199500 Scales tax. $15960 OGS To $124500 Inventory $124000 15 SUNDAY Warranty experie $9975 $9975 Warranty Payable

$15960 (5) Sales teux payable $15960 I Cash (6) Cash/ Bank $20000 Note Payable $20000 (7) Warranty payable $5700 - To Cash $5700 (8) Operating expenses $55000 cash. $55000 (9) (10) Accounts Payable $125900 $125900 Interest exp $467 - Accrued interest $467 [ $20000 x7% 4/12)

- Cash obat 52 $ 15960 $49500 7) $5700 2018$60 6). $55000 $20000 9) $125900 end deal $82400 - Accounts Payable Beg bal o 1 (2) $175500 $125900 Cend balance $49600 Beg bal Wersanties Payable. 0 100 89975 $5700 End balance $4275

20000 Begbal Notes Payable o (6) End bal $20000 Sales Revenue. Bog bal o (3) $199500 End bal $299500 Other operating expense Bogbal o To $55000 end bad $5 Socol Inexst exp Bea bal (10) Endbal o $467 $467 1

Bea bal Sceles Taa payable (3) $ 15960 $15960 Begbal $467 $467 Interest payable o (107 Cend deal Common stocle 0 160 Endeal 4950o Bea bal $49500 cogs Beg bal o $124500 $124500! End bal

Warranty expense bal o $9975 $9975 End kal