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 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?

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 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?

Name: The following transactions apply to Ozark Sales for Year 1:1. The bus
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: 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

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

See similar textbooks

Similar questions

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.
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 $49,500 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 Prepare the income statement, balance sheet, and statement of cash flows for…
Question: 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 $175,000 on account. 3. Sold equipment for $204,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $129,500. 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 $154,500 of the sales. 6. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 6 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 $56,000 for the year. 9. Paid $124,100 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. 1. Prepare the income statement for Year 1. 2.…
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 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 statements…
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 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…
The following selected transactions were taken from the books of Ripley Company for Year 1: 1. On February 1, Year 1, borrowed $57,000 cash from the local bank. The note had a 8 percent interest rate and was due on June 1, Year 1. 2. Cash sales for the year amounted to $220,000 plus sales tax at the rate of 8 percent. 3. Ripley provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 3 percent of sales. 4. Paid the sales tax to the state sales tax agency on $205,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $50,000 cash from the local bank. The note had a 9 percent interest rate and a one-year term to maturity. 7. Paid $3,500 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $130,000 for breach of contract. The company attorney does not believe the suit has merit. Required a. Answer the following questions: 1. What amount of cash did Ripley pay for interest during…