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The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $50,000 from the issue of
The following transactions apply to Ozark Sales for Year 1: 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, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2 7. Paid $6,200 for warranty repairs during the year 8. Pald 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 b. Prepare the income statement, balance sheet, and statement of cash flows for Year 1 c. What is the total amount of current liabilities at December 31, Year 1?
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