Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Columns for events that have no effect on any of the elements should be left blank.) Note: Not all cells will require an input. Effect of Transactions on Financial Statements Balance Sheet Income Statement Event Assets = Liabilities + Equity Revenue Expenses = Net Income Statement of Cash Flows 1. + II II = + + II + FA + + II = 2. За. + 3b. 4. 5. 6. + 7. 8. 9. 10 10. = = +++++++ + + = OA OA FA OA OA OA 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Required
a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase
or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity
(IA), or financing activity (FA). Columns for events that have no effect on any of the elements should be left blank.)
Note: Not all cells will require an input.
Effect of Transactions on Financial Statements
Balance Sheet
Income Statement
Event
Assets
=
Liabilities
+
Equity
Revenue
Expenses
=
Net Income
Statement of Cash
Flows
1.
+
II
II
=
+
+
II
+
FA
+
+
II
=
2.
За.
+
3b.
4.
5.
6.
+
7.
8.
9.
10
10.
=
=
+++++++
+
+
=
OA
OA
FA
OA
OA
OA
Transcribed Image Text:Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Columns for events that have no effect on any of the elements should be left blank.) Note: Not all cells will require an input. Effect of Transactions on Financial Statements Balance Sheet Income Statement Event Assets = Liabilities + Equity Revenue Expenses = Net Income Statement of Cash Flows 1. + II II = + + II + FA + + II = 2. За. + 3b. 4. 5. 6. + 7. 8. 9. 10 10. = = +++++++ + + = OA OA FA OA OA OA
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.
Transcribed Image Text: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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 1 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education