! Required information Exercise 7-21 Current liabilities LO 7-1,7-2, 7-4, 7-10 [The following information applies to the questions displayed below.) The following transactions apply to Ozark Sales for 2018: 1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $176,500 on account. 3. Sold equipment for $201,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $126,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 3 percent of sales. 5. Paid the sales tax to the state agency on $151,500 of the sales. 6. On September 1, 2018, borrowed $19,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, 2019. 7. Paid $6,000 for warranty repairs during the year. 8. Paid operating expenses of $53,500 for the year. 9. Paid $125,000 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. C4D OZARK SALES Balance Sheet As of December 31, 2018 Assets Cash Merchandise inventory Total assets $ 0 Liabilities Accounts payable Sales tax payable Notes payable Warranties payable $ 0 Total liabilities Stockholders' equity Common stock Retained earnings $ 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 OZARK SALES Statement of Cash Flows For the Year Ended December 31, 2018 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 flow 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 PAR Ral Sheet OZARK SALES Statement of Cash Flows For the Year Ended December 31, 2018 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 flow 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 PAR Ral Sheet