The following transactions apply to Ozark Sales for Year 1: The business was...
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Accounting
The following transactions apply to Ozark Sales for Year 1:
The business was started when the company received $50,000 from the issue of common stock.
Purchased equipment inventory of $380,000 on account.
Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000.
Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales.
Paid the sales tax to the state agency on $400,000 of the sales.
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.
Paid $6,200 for warranty repairs during the year.
Paid operating expenses of $78,000 for the year.
Paid $250,000 of accounts payable.
Recorded accrued interest on the note issued in transaction no. 6.
Prepare the journal entries for the preceding transactions and post them to the appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers nearest dollar amount.)
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