- Required Information The Following Information Applies To The Questions Displayed Below The Following Transactions Ap 1 (38.21 KiB) Viewed 8 times
Required information [The following information applies to the questions displayed below.] 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 $176,000 on account. 3. Sold equipment for $204,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $129,000. 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 $154,000 of the sales. 6. On September 1, Year 1, borrowed $19,500 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 $55,000 for the year. 9. Paid $125,800 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.
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.) Event 1. 2. 3a 3b. 4. 5. 6 7 8. 9 10. Assets + + Balance Sheet = = Liabilities + Effect of Transactions on Financial Statements + + + + + + + + + + + Equity + + Revenue Income Statement Expenses = = = = = = Net Income Statement of Cash Flows + FA
b-1. Prepare the income statement for Year 1. (Round your answers to the nearest dollar amount.) Sales revenue Cost of goods sold Gross margin Expenses OZARK SALES Income Statement For the Year Ended December 31, Year 1 Operating expenses Warranty expense Total expenses Operating income $ $ 204,000 204,000 0 204,000 204,000
b-1. Prepare the income statement for Year 1. (Round your answers to the nearest dollar amount.) Sales revenue Cost of goods sold Gross margin Expenses OZARK SALES Income Statement For the Year Ended December 31, Year 1 Operating expenses Warranty expense Total expenses Operating income $ $ 204,000 204,000 0 204,000 204,000
b-1. Prepare the income statement for Year 1. (Round your answers to the nearest dollar amount.) Sales revenue Cost of goods sold Gross margin Expenses OZARK SALES Income Statement For the Year Ended December 31, Year 1 Operating expenses Warranty expense Total expenses Operating income $ $ 204,000 204,000 0 204,000 204,000
c. What is the total amount of current liabilities at December 31, Year 1? (Round your answer to the nearest dollar amount.) Total current liabilities