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Required information Exercise 9-8A (Static) Current liabilities LO 9-1, 9-2, 9-4 Skip to question [The following information applies to the questions displayed below.] The following
Required information
Exercise 9-8A (Static) Current liabilities LO 9-1, 9-2, 9-4
Skip to question
[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 $380,000 on account.
- Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000.
- Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales.
- Paid the sales tax to the state agency on $400,000 of the sales.
- On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2.
- Paid $6,200 for warranty repairs during the year.
- Paid operating expenses of $78,000 for the year.
- Paid $250,000 of accounts payable.
- Recorded accrued interest on the note issued in transaction no. 6.
Exercise 9-8A (Static) Part c
c. What is the total amount of current liabilities at December 31, Year 1?
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