Question

Required information The following information applies to the questions displayed below. The following transactions apply to Ozark Sales for 2018 1. The business was started when the company received $49,000 from the issue of common stock. 2. Purchased equipment inventory of $175,500 on account. 3. Sold equipment for $192,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $117,500 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales 5. Paid the sales tax to the state agency on $142,500 of the sales. 6. On September 1, 2018, borrowed $21,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, 2019. 7. Paid $5,800 for warranty repairs during the year. 8. Paid operating expenses of $55,500 for the year 9. Paid $124,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6.

Answer 1

	Assets                 =		Liabilities                                                                       +					Stockholers Equity
Event	cash	Merchandise	Accounts	Sales tax	Warranty	interest	notes	Common	Retaine
no		inventory	payable	payable	payable	payable	payable	Stock	earnings
1	49,000	0	0	0	0	0	0	49,000	0
2	0	175,500	175,500	0	0	0	0	0	0
3a.	207,900	0	0	15400	0	0	0	0	192,500
3b.	0	-117500	0	0	0	0	0	0	-117,500
4	0	0	0	0	9,625	0	0	0	-9,625
5	-11400	0	0	-11400	0	0	0	0	0
6	21,000	0	0	0	0	0	21,000	0	0
7	-5,800	0	0	0	-5,800	0	0	0	0
8	-55,500	0	0	0	0	0	0	0	-55,500
9	-124,900	0	-124900	0	0	0	0	0
10	0	0	0	0	0	350	0	0	-350
Bal	80,300	58000	50600	4000	3825	350	21000	49,000	9525
		Revenues	expenses	net	Statement of cash flow
				income
		0	0	0	49,000	FA
		0	0	0	0	NA
		192,500	0	192500	207,900	OA
		0	117,500	-117500	0	NA
		0	9,625	-9625	0	NA
		0	0	0	-11,400	OA
		0	0	0	21,000	FA
		0	0	0	-5,800	OA
		0	55,500	-55,500	-55,500	OA
		0	0	0	-124,900	OA
		0	0	350	0	OA
		192500	182625	10225	80,300