[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 $177,500 on account.
3. Sold equipment for $207,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $132,500.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales.
5. Paid the sales tax to the state agency on $157,500 of the sales.
6. On September 1, Year 1, borrowed $20,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2.
7. Paid $5,900 for warranty repairs during the year.
8. Paid operating expenses of $53,000 for the year.
9. Paid $125,900 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.

b-1. Prepare the income statement for Year 1. (Round your answers to the nearest dollar amount.) X Answer is not complete. OZARK SALES Income Statement For the Year Ended December 31, Year 1 Sales revenue 69 207,500 Cost of goods sold (132,500) Gross margin 75,000 Expenses Warranty expense 103,750 X Operating expenses 53,000 Total expenses 156,750 Operating income (81,750) Interest expense Net income V (81,750)Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities: Inflow from customers Inflow from sales tax Outflow for expenses Outflow for sales tax Outflow to purchase inventory Net cash flows from operating activities 0 Cash flows from investing activities: Cash flows from financing activities Inflow from loan Inflow from stock issue Net cash flows from financing activities 0 Net change in cash 0 Plus: Beginning cash balance Ending cash balance 0Balance Sheet As of December 31, Year 1 Assets Accounts receivable X Accounts receivable X Total assets 0 Liabilities Accumulated depreciation X Total liabilities 0 Stockholders' equityAccounts receivable Accounts receivable X Total assets 0 Liabilities Accumulated depreciation X Total liabilities 0 Stockholders' equity Total stockholders' equity O Total liabilities and stockholders' equity O