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Exercise 9-8A (Algo) Current liabilities LO 9-1, 9-2, 9-4 [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales
Exercise 9-8A (Algo) Current liabilities LO 9-1, 9-2, 9-4
[The following information applies to the questions displayed below.] 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 $174,500 on account.
- Sold equipment for $205,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $130,500.
- 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 $155,500 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 $6,000 for warranty repairs during the year.
- Paid operating expenses of $53,500 for the year.
- Paid $125,300 of accounts payable.
- Recorded accrued interest on the note issued in transaction no. 6.
Exercise 9-8A (Algo) Part b
b-2. Prepare the balance sheet for Year 1. (Round your answers to the nearest dollar amount.)
b-3. Prepare the statement of cash flows for Year 1. (Enter amounts to be deducted and cash outflows with a minus sign. Round your answers to the nearest whole dollar.)
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