Problem 7-1 1. 2. 3. 4. 5. 6. 7 8 9 10. a. 15 points The following transactions apply to Oklahoma Corp. for 2018: The business was started when Oklahoma Corp. received Purchased $1,235,000 of merchandise on account. $1,560,000 cash (not including sales tax). Sales tax of Sold merchandise for is collected when the merchandise is sold. The merchandise had a cost of b. C. Paid Paid Paid $422,500 from the issue of common stock. Good idea to split this into two accounting entries - think chapter 3. Hint: 3a and 3b Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty payable claims would amount to 3% of merchandise sales excluding sales tax. Think of it as a contingent liability Paid the sales tax of to the state agency on $1,040,000 of the sales, (not the entire amount) 8% On September 1, 2018, borrowed $162,500 from the local bank. The note had a annual interest rate and matures on August 31, 2019. $884,000 of accounts payable. 8% $942,500 Recorded accrued interest payable at the end of the year for 12/31. 8% $26,000 for warranty repairs during the year. This is the payment of warranties payable. $403,000 cash in operating expenses for the year. REQUIRED Record the above transactions in a horizontal statements model. Students will have to rename asset accounts in the model to accommodate the 5 liability accounts in problem. Prepare the income statement, balance sheet, and statement of cash flows for 2018. What is the total amount of current liabilities at December 31, 2018?

The following transactions apply so Odahema Corp. for aote: 1. The business was stulid when Olahoma Corp, recelved $422.500 from the issue of common stock. 2. Purchased $1,235,000 of morchandise on acoount. 3 Sold merchanole lor $1,560,000 cash (not including sales tux), Saltes tax ef as b colected when the merchandise is sold. The menchandise had a cost of $942,500 Good liba to tole thit into lwo accounting entries - think chapter 3 . Hint : 3 a and 30 4. Provided a six-monei warranty on the merchondise sold Based on induitry entimates, the 5. Prid the soles tix of to be state apency on $1,040,000 of the sales, (not the entire amount) 6. On Sephember 1, 2018, benowed $162.500 from the local bark. The note had a 7 Paid antual interest rate and matres on Augan 31,2019 stat,000 of acoounts payabie. B Paid $25,000 for warranity repairs diding the vear, This is the poyment of mananties peyable. Paid \$400.000 canh in operating expenses for the yew. 10 Aesorded acconed interest payalie at the end of the wew lor 12/31. AEOurro a. Recond the above transactions in a horitontal statements mosel. b. Pepare the income statement, talance sheet, med staterment of cash flows for 2018