The following transactions apply to Ozark Sales for Year 1 The business was started when the company received $48,000 from the issue of common stock Purchased equipment inventory of $175,000 on account Sold equipment for $191,000 cash (not including sales tax) Sales tax of 7 percent is collected when the merchandise is sold The merchandise had a cost of $116,000 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 $141,000 of the sales On September 1, Year 1, borrowed $21,000 from the local bank The note had a 7 percent interest rate and matured on March 1, Year 2 Paid $5,900 for warranty repairs during the year Paid operating expenses of $52,000 for the year Paid $124,900 of accounts payable Recorded accrued interest on the note issued in transaction no 6 Exercise 9 8A (Algo) Part b b 2 Prepare the balance sheet for Year 1 Note Round your answers to the nearest dollar amount OZARK SALES Balance Sheet As of December 31, Year 1 Assets Cash Merchandise inventory Total assets $0 Liabilities Accounts payable Sales tax payable Notes payable Warranty payable Interest payable Total liabilities 0 Stockholders equity Common stock Retained earnings Total stockholders' equity 0 Total liabilities and stockholders' equity $0 b 3 Prepare the statement of cash flows for Year 1 Note Enter amounts to be deducted and cash outflows with a minus sign Round your answers to the nearest whole dollar OZARK SALES 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 $0

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

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 27, 2024

The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock.

The following transactions apply to Ozark Sales for Year 1:

The business was started when the company received $48,000 from the issue of common stock.

Purchased equipment inventory of $175,000 on account.

Sold equipment for $191,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,000.

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 $141,000 of the sales.

On September 1, Year 1, borrowed $21,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2.

Paid $5,900 for warranty repairs during the year.

Paid operating expenses of $52,000 for the year.

Paid $124,900 of accounts payable.

Recorded accrued interest on the note issued in transaction no. 6.

Exercise 9-8A (Algo) Part b

b-2. Prepare the balance sheet for Year 1.

Note: Round your answers to the nearest dollar amount.

OZARK SALES
Balance Sheet
As of December 31, Year 1
Assets
Cash
Merchandise inventory

Total assets		$0
Liabilities
Accounts payable
Sales tax payable
Notes payable
Warranty payable
Interest payable


Total liabilities		0
Stockholders equity
Common stock
Retained earnings

Total stockholders' equity		0
Total liabilities and stockholders' equity		$0

b-3. Prepare the statement of cash flows for Year 1.

Note: Enter amounts to be deducted and cash outflows with a minus sign. Round your answers to the nearest whole dollar.

OZARK SALES
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		$0