Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for 2018: The business was started when the company received $48,500 from the issue of common stock. Purchased equipment inventory of $177,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. Paid the sales tax to the state agency on $143,500 of the sales. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $52,500 for the year. Paid $124,500 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Exercise 7-21 Part b Prepare the income statement, balance sheet, and statement of cash flows for 2018.
Exercise 7-21 Current liabilities LO 7-1, 7-2, 7-4, 7-10 [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for 2018: The business was started when the company received $48,500 from the issue of common stock. Purchased equipment inventory of $177,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. Paid the sales tax to the state agency on $143,500 of the sales. On September 1, 2018, borrowed $19,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019. Paid $5,900 for warranty repairs during the year. Paid operating expenses of $52,500 for the year. Paid $124,500 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Exercise 7-21 Part b Prepare the income statement, balance sheet, and statement of cash flows for 2018.
Related questions
| The followingtransactions apply to Midsouth Equipment Sales Corp. for 2014: |
| 1. | The business was started when Midsouth received $48,500 from theissue of common stock. |
| 2. | Purchased$176,000 of merchandise on account. |
| 3. | Sold merchandise for $197,500 cash (not including sales tax).Sales tax of 7 percent is collected when the merchandise is sold.The merchandise had a cost of $122,500. |
| 4. | Provided a six-month warranty on the merchandise sold. Based onindustry estimates, the warranty claims would amount to 4 percentof merchandise sales. |
| 5. | Paid the salestax to the state agency on $147,500 of the sales. |
| 6. | On September 1, 2014, borrowed $19,500 from the local bank. Thenote had a 6 percent interest rate and matures on March 1,2015. |
| 7. | Paid $5,600 forwarranty repairs during the year. |
| 8. | Paid operatingexpenses of $53,000 for the year. |
| 9. | Paid $126,000 ofaccounts payable. |
| 10. | Recorded accrued interest at the end of the year. What is the total amount of current liabilities at December 31,2014? |
