The following transactions apply to Ozark Sales for 2018: 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased equipment inventory of $380,000 on account. 3. 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. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. 5. Paid the sales tax to the state agency on $400,000 of the sales. 6. On September 1, 2018, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, 2019. 7. Paid $6,200 for warranty repairs during the year. 8. Paid operating expenses of $78,000 for the year. 9. Paid $250,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate calculations and round your answers to the nearest whole dollar amounts.) Net OZARK Horizontal Statements Model Balance Sheet Income Statement Liabilities Assets Stockholders' Event Equity Statement of No. Sales Revenue Expense Income Cash Flows Merchandise Account Warranty Interest. Notes Common Retainedevenu Tax Cash + Inventory Payable Payable * Payable" Payable" Payable Stock Earnings 1. 50,000 + + 50,000+ 50,000 FA + 380,000 = 380,000+ 3a. 510,000+ + 330,000+ + 190,000 510,000 OA 1+1+1+ 3b. f 4. +1+1+1+ + 50,000+ +(6,200) 50,000 (6,200) OA |-78,000 =((78,000 (78,000 TOA |(250,00 DOA 5. 6. 50,000 + 7. (6,200) +f 8. ((78,000 + 9. f(250,000+ 10. + Bal. 275,800 + + +(78,000 + = f(250,000+ 380,000 = 130,000 + 330,000 + 16,200) + 0 + 50,000 + 50,000+ 112,000 0-78,000 =((78,000 275,800 1. The business was started when the company received $50,000 from the issue of common stock. 2. Purchased equipment inventory of $380,000 on account. 3. 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. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. 5. Paid the sales tax to the state agency on $400,000 of the sales. 6. On September 1, 2018, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, 2019. 7. Paid $6,200 for warranty repairs during the year. 8. Paid operating expenses of $78,000 for the year. 9. Paid $250,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. Required a. Record the given transactions in a horizontal statements model like the following one. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA), and leave the cell blank if there is no effect. Do not round intermediate calculations and round your answers to the nearest whole dollar amounts.) Net + + + + + + + OZARK Horizontal Statements Model Balance Sheet Income Statement Event Assets Stockholders' Liabilities Equity Statement of No. Merchandise Accounts Sales Warranty Interest Notes Cash Flows Common Ratainakevenue Expense Incama Cash 17 Tax * Inventory Payable" Pavable Payable" Payable Payable Stock * Earnings 1. 50,000 + 1 + 50,000+ 50,000 FA 2. 1+ 380,000 = 380,000+ 3a. 510,000+ 1+ 330,000 + + 190,000 510,000 OA 3b. 4. 5. 6. 50,000 + 50,000 7. (6,200) + 5,200)| (6,200) OA 8. f(78,000) + f(78,000 78,000 =f(78,000 (78,000 OA 9. f(250,000+ = [(250,000+ f(250,0000A 10. Bal. 275,800 + 380,000 = 130,000 + 330,000 + (6,200) + + 50,000 + 50,000 + 112,000 0-78,000 = 78,000 275,800 + + + + + + + + + + + + + + + + + 14444441 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
