The following transactions apply to Ozark Sales for Year 1 1. The business was started when the company received $48.500 from the issue of common stock. 2. Purchased equipment inventory of $176,000 on account. 3. Sold equipment for $196,500 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $121,500. 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 $146,500 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 $6,000 for warranty repairs during the year.. 8. Paid operating expenses of $54,000 for the year 9. Paid $125,000 of accounts payable 10. Recorded accrued interest on the note issued in transaction no. 6

The following transactions apply to Ozark Sales for Year 1 1. The business was started when the company received $48.500 from the issue of common stock. 2. Purchased equipment inventory of $176,000 on account. 3. Sold equipment for $196,500 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $121,500. 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 $146,500 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 $6,000 for warranty repairs during the year.. 8. Paid operating expenses of $54,000 for the year 9. Paid $125,000 of accounts payable 10. Recorded accrued interest on the note issued in transaction no. 6

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
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…
The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $49,500 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $190,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $115,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. 5. Paid the sales tax to the state agency on $140,500 of the sales. 6. On September 1, Year 1, borrowed $19,000 from the local bank. The note had a 7 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 $54,500 for the year. 9. Paid $124,400 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.
The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $48,000 from the issue of common stock. 2. Purchased equipment inventory of $174,500 on account. 3. Sold equipment for $199,500 cash (not including sales tax). Sales tax of 6 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 3 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 $21,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $52,000 for the year. 9. Paid $125,700 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. c. What is the total amount of current liabilities at…
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 $175,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. 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 $143,500 of the sales. On September 1, Year 1, borrowed $20,000 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 $124,400 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…
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 $175,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. 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 $143,500 of the sales. On September 1, Year 1, borrowed $20,000 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 $124,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Prepare the income statement, balance sheet, and statement of cash flows for…
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 $176,000 on account. Sold equipment for $199,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. 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 $149,500 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 $55,500 for the year. Paid $124,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. b-1. Prepare the income statement for Year 1. Note: Round your answers to the nearest…
The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $50,000 from the issue of common stock. Purchased equipment inventory of $380,000 on account. 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. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. Paid the sales tax to the state agency on $400,000 of the sales. 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. Paid $6,200 for warranty repairs during the year. Paid operating expenses of $78,000 for the year. Paid $250,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Show the effect of these transactions on the financial statements using a…
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 merchandise inventory of $176,000 on account. Sold merchandise for $202,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $127,000. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $152,000 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 $6,000 for warranty repairs during the year. Paid operating expenses of $55,500 for the year. Paid $124,300 of accounts payable. Recorded accrued interest on the note issued in transaction number 6. b1. Prepare the journal entries for the preceding transactions.b2. Post…
The following transactions apply to Ozark Sales for Year 1 1. The business was started when the company received $48,500 from the issue of common stock 2. Purchased equipment inventory of $176,000 on account. 3. Sold equipment for $196,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $121,500, 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 $146,500 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 $6,000 for warranty repairs during the year. 8. Paid operating expenses of $54,000 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…