Required information [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 $48,000 from the issue of common stock. 2. Purchased equipment inventory of $175,000 on account. 3. Sold equipment for $200,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $125,500. 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 $150,500 of the sales. 6. On September 1, 2018, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, 2019. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $52,500 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Reg B Inc Stmt Reg B Bal Sheet Reg B Stmt Cash Flows Prepare the income statement for 2018. (Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) OZARK SALES Income Statement For the Year Ended December 31, 2018 Sales revenue Cost of goods sold Gross margin Expenses Warranty expenses $ 6.300 Operating expenses 55,500 $ 210,000 135,000 75,000 Total operating expenses Operating income Interest expense (61,800) 13,200 1,025 Net income $ 12, 175 OZARK SALES Balance Sheet As of December 31, 2018 Assets Cash Merchandise inventory $ 95,400 40,000 $ 135,400 $ Total assets Liabilities Accounts payable Sales tax payable Warranties payable Notes payable Interest payable 49,400 3,500 800 20,500 1,025 $ 75,225 Total liabilities Stockholders' equity Common stock Retained earnings $ 48,000 12,175 Total stockholders' equity Total liabilities and stockholders' equity $ 60,175 $ 135,400