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Required information [The following information applies to the questions displayed below.] The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $177,000 on account. 3. Sold equipment for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000. 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 $142,000 of the sales. 6. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, Year 2. 7. Paid $5,900 for warranty repairs during the year. 8. Paid operating expenses of $53,500 for the year. 9. Paid $125,900 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. OZARK SALES Balance Sheet As of December 31, Year 1 Assets Cash Merchandise inventory Total assets Liabilities Accounts payable Sales tax payable Notes payable Warranty payable Interest payable 0 Total liabilities Stockholders' equity Common stock Retained earnings 48,500 Total stockholders' equity Total liabilities and stockholders' equity 48,500 48,500 $ OZARK SALES Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities: Inflow from customers Inflow from sales tax Outflow for expenses Outflow for sales tax Outflow to purchase inventory $ 0 Net cash flows from operating activities Cash flows from investing activities: Cash flows from financing activities Inflow from loan Inflow from stock issue 0 0 Net cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance 0 $ GA 0

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