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 $191,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $116,500 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 $141,500 of the sales. 6. On September 1. Year 1, borrowed $21,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. 7. Pald $5,700 for warranty repairs during the year 8. Pald operating expenses of $53,500 for the year. 9. Paid $124,300 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? OZARK SALES Horizontal Statements Model Income Statement Event No Balance sheet Liabilities Stockholders' Equity Cash Merchandise Inventory Accounts Payable Sales Tax Payable Warranty Payable Interest Payable Statement of Cash Flows Notes Payable Common Stock Expense Retained Revenue Net Income Earnings 1 2 Jb 4 5 6 7 B 9 + 10 Bal D 0 D. 0 0 OZARK SALES Income Statement For the Year Ended December 31, Year 1 Sales revenue $ 191,500 Cost of goods sold 116,500 Gross margin 75,000 Expenses Warranty expenses $ 5,745 Operating expenses 53,500 Total operating expenses Operating income Interest expense (59,245) 15,755 420 $ Net income $ 15,335 OZARK SALES Balance Sheet As of December 31, Year 1 Assets Cash Merchandise inventory $ 0 Total assets Liabilities Accounts payable Sales tax payable Warranties payable Notes payable Interest payable S 0 Total liabilities Stockholders' equity Common stock Retained earnings $ 0 Total stockholders' equity Total liabilities and stockholders' equity S 0