The following transactions apply to Ozark Sales for Year 1:

1. The business was started when the company received $48,500 from the issue of common stock.
2. Purchased equipment inventory of $174,500 on account.
3. Sold equipment for $199,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $124,000.
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 $149,000 of the sales.
6. On September 1, Year 1, borrowed $22,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2.
7. Paid $5,700 for warranty repairs during the year.
8. Paid operating expenses of $54,500 for the year.
9. Paid $125,700 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.

Required:

Prepare the income statement for Year 1.

Prepare the balance sheet for Year 1.

Prepare the statement of cash flows for Year 1.