The following transactions apply to Bobs Scuba Sales for 2018 The business was started when the company received $48,500 from the issue of common stock Purchased equipment inventory of $176,000 on the account Sold equipment for $202,500 cash (not including sales tax) A sales tax of 7 percent is collected when the merchandise is sold The merchandise had a cost of $127,500 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 $152,500 of the sales On September 1, 2018, borrowed $21,500 from the local bank The note had a 7 percent interest rate and matured on March 1, 2019 Paid $5,900 for warranty repairs during the year Paid operating expenses of $55,500 for the year Paid $124,200 of accounts payable Recorded accrued interest on the note issued in transaction no 6 Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from operating activities Inflow from customers $ 202,500 Outflow for expenses Outflow for sales tax Outflow to purchase inventory $ 202,500 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Inflow from stock issue Inflow from loan 202,500 Net cash flows from financing activities Net change in cash Plus Beginning cash balance Ending cash balance $ 202,500

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 30, 2024

The following transactions apply to Bobs Scuba Sales for 2018: The business was started when the company received $48,500 from the issue of common stock.

The following transactions apply to Bobs Scuba Sales for 2018:

The business was started when the company received $48,500 from the issue of common stock.
Purchased equipment inventory of $176,000 on the account.
Sold equipment for $202,500 cash (not including sales tax). A sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $127,500.
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 $152,500 of the sales.
On September 1, 2018, borrowed $21,500 from the local bank. The note had a 7 percent interest rate and matured on March 1, 2019.
Paid $5,900 for warranty repairs during the year.
Paid operating expenses of $55,500 for the year.
Paid $124,200 of accounts payable.
Recorded accrued interest on the note issued in transaction no. 6.

image text in transcribed

Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from operating activities Inflow from customers $ 202,500 Outflow for expenses Outflow for sales tax Outflow to purchase inventory $ 202,500 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Inflow from stock issue Inflow from loan 202,500 Net cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance $ 202,500