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 $199,000 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $124,000, 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 $149,000 of the sales 6. On September 1, Year 1, borrowed $22,000 from the local bank. The note had a 6 percent interest rate and matured on March 1 Year 2 7. Paid $5,600 for warranty repairs during the year 8. Paid operating expenses of $55,000 for the year 9. Paid $125,100 of accounts payable 10. 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? malate this question by entering your answers in the tabs below.
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 $199,000 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $124,000, 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 $149,000 of the sales 6. On September 1, Year 1, borrowed $22,000 from the local bank. The note had a 6 percent interest rate and matured on March 1 Year 2 7. Paid $5,600 for warranty repairs during the year 8. Paid operating expenses of $55,000 for the year 9. Paid $125,100 of accounts payable 10. 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? malate this question by entering your answers in the tabs below.
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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