[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 $49,500 from the issue of common stock. 2. Purchased merchandise inventory of $175,000 on account. 3. Sold merchandise for $199,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. 4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. 5. Paid the sales tax to the state agency on $149,500 of the sales. 6. On September 1, Year 1, borrowed $20,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. 7. Paid $5,600 for warranty repairs during the year. 8. Paid operating expenses of $54,000 for the year. 9. Paid $125,600 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6. Exercise 9-8A (Algo) Part b b1. Prepare the journal entries for the preceding transactions. b2. Post the transaction to the appropriate T-accounts.

[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 $49,500 from the issue of common stock. 2. Purchased merchandise inventory of $175,000 on account. 3. Sold merchandise for $199,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. 4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. 5. Paid the sales tax to the state agency on $149,500 of the sales. 6. On September 1, Year 1, borrowed $20,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. 7. Paid $5,600 for warranty repairs during the year. 8. Paid operating expenses of $54,000 for the year. 9. Paid $125,600 of accounts payable. 10. Recorded accrued interest on the note issued in transaction number 6. Exercise 9-8A (Algo) Part b b1. Prepare the journal entries for the preceding transactions. b2. Post the transaction to the appropriate T-accounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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