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 $176,000 on account.
3. Sold equipment for $198,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $123,500.
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 $148,500 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. Paid $5,700 for warranty repairs during the year.
8. Paid operating expenses of $55,500 for the year.
9. Paid $125,700 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.

Required

1. Record the given transactions in a horizontal statements model.
2. Prepare the income statement, balance sheet, and statement of cash flows for Year 1.
3. What is the total amount of current liabilities at December 31, Year 1?

OZARK SALES Horizontal Statements Model Balance Sheet Income Statement Assets Liabilities + Stockholders' Equity Event No. Statement of Cash Flows Revenue Expense = Cash Merchandise Inventory + Accounts Payable Sales Tax Payable Warranty Payable + Net Income Interest Payable Notes Payable Common Stock + Retained Earnings + 1. + + + + + + 2. + + + + + + + 3a. + + + + + 3b. + + + + + + 4. + + + + + + 5. + + + + + + + + + + + + + + + + + + + 6. + + + + + + + 7. + = + + + + = 8. + + + + + + + 9. + + + + + + + 10. + = + + + + + Bal. + + + + + + OZARK SALES Income Statement For the Year Ended December 31, Year 1 Expenses Total operating expenses OZARK SALES Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Total liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity OZARK SALES Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities Net change in cash Ending cash balance Total current liabilities