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 $177,000 on account.
3. Sold equipment for $200,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $125,000.
4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.
5. Paid the sales tax to the state agency on $150,000 of the sales.
6. On September 1, Year 1, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2.
7. Paid $5,500 for warranty repairs during the year.
8. Paid operating expenses of $55,500 for the year.
9. Paid $125,200 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.

Required a. Show the effect of these transactions on the financial statements using a horizontal statements model. The first transaction is recorded as an example.

Net Income Statement of Cash Expenses Event Assets Liabilities Equity Revenue + Flows 1. FA + + 2. 3a. 3b 4. 5. 6. 7 8. 9, 10. co