! Required information Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions displayed below.) The following transactions apply to Ozark Sales for 2018: 1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $176,500 on account. 3. Sold equipment for $201,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $126,500. 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 $151,500 of the sales. 6. On September 1, 2018, borrowed $19,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, 2019 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $53,500 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Guarino 7 21 Norte OZARK Horizontal Statements Model Balance Sheet Income Statement Assets Event Liabilities + Stockholders' Equity Statement of Cash Flows No. Revenue - Expense Cash + Merchandise Inventory Accounts Payable Sales Tax Payable Net Income Warranty Payable Interest Payable Notes Payable Common Stock + Retained Earnings 1. 48,500 + + + + + 48,500| + 48,500 FA 2. + 176,500] = 176,500 + + + + + + . . 201,500 + + + + + + 3b. + + + + + + 4. + + + + + + + 5. + + + + + + + 6. + + + + + + 7. + + + + + + + + + + + + + + + + 8. + + + + + + + + 9. + + + + + 10. + + + + + + Bal. 250,000+ 176,500 = 176,500 + 0 + 0 + 0 + 0+ 48,500 + 0 0 0 0 48,500