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 $178,000 on account.Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000.Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales.Paid the sales tax to the state agency on $142,000 of the sales.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.Paid $5,900 for warranty repairs during the year.Paid operating expenses of $56,000 for the year.Paid $124,000 of accounts payable.Recorded accrued interest on the note issued in transaction no. 6. RequiredRecord the given transactions in a horizontal statements model.Prepare the income statement, balance sheet, and statement of cash flows for Year 1.What is the total amount of current liabilities at December 31, Year 1? Complete this question by entering your answers in the tabs below.Req B BalSheetReq B StmtCash FlowsPrepare the balance sheet for Year 1. (Round your answers to the nearest whole dollar.)OZARK SALESBalance SheetAs of December 31, Year 1Req AAssetsReq B IncStmtTotal assetsLiabilitiesTotal liabilitiesStockholders' equityTotal stockholders' equityTotal liabilities and stockholders' equity< Req B Inc StmtReq CReq B Stmt Cash Flows

An income statement is a financial report that indicates the revenue and expenses of a business. It…

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Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 4E

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Question

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 $178,000 on account.
Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000.
Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales.
Paid the sales tax to the state agency on $142,000 of the sales.
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.
Paid $5,900 for warranty repairs during the year.
Paid operating expenses of $56,000 for the year.
Paid $124,000 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 income statement, balance sheet, and statement of cash flows for Year 1.
What is the total amount of current liabilities at December 31, Year 1?

Complete this question by entering your answers in the tabs below.
Req B Bal
Sheet
Req B Stmt
Cash Flows
Prepare the balance sheet for Year 1. (Round your answers to the nearest whole dollar.)
OZARK SALES
Balance Sheet
As of December 31, Year 1
Req A
Assets
Req B Inc
Stmt
Total assets
Liabilities
Total liabilities
Stockholders' equity
Total stockholders' equity
Total liabilities and stockholders' equity
< Req B Inc Stmt
Req C
Req B Stmt Cash Flows

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