Question

mework 1 Holp Save & Ex Chee Required information (The following information applies to the questions 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. Pur 3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is chased equipment inventory of $380,000 on account. 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 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. Paid 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. c. What is the total amount of current liabilities at December 31, Year 1? (Round your intermediate calculation to nearest whole dollar.) Total current liabiliti Prey 12 of 18 İİİ Next >

Answer 1

1	Accounts payable	$130,000
2	Sales tax payable	$8,800
3	Warranty liability	$4,000
4	Note Payable	$50,000
5	Interest payable	$666.67
	Total Current liabilities	$193,467
	Note:
1	Accounts payable (For equipment inventory)	$380,000
	Less: accounts payable paid	$250,000
	Balance on Dec 31	$130,000
2	Sales tax collected (510000 x 8%)	40,800
	Less: Sales tax deposited	32,000
	Sales tax payable	8,800
3	Warranty liability (510000 x 2%)	10,200
	Less: Warranty claimed paid	6,200
	Warranty liability payable(510000 x 2%)	4,000
4	Note payable is for 6 months thus it is classified as current liability
5	Interest payable (50000 x 4% x 4/12 months)	666.67