Reference no: EM132642832
Question - The following transactions apply to Ozark Sales for 2018:
1. The business was started when the company received $49,500 from the issue of common stock.
2. Purchased equipment inventory of $175,000 on account.
3. Sold equipment for $194,000 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $119,000.
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 $144,000 of the sales.
6. On September 1, 2018, borrowed $21,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, 2019.
7. Paid $5,600 for warranty repairs during the year.
8. Paid operating expenses of $52,500 for the year.
9. Paid $124,400 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.
Required - Prepare the income statement, balance sheet, and statement of cash flows for 2018.