The following transactions apply to Ozark Sales for Year 1: a. The business was started when the company received $50,000 from the issue of common stock.
b. Purchased equipment inventory of $176,500 on account.
c. Sold equipment for $204,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $129,000.
d. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.
e. Paid the sales tax to the state agency on $154,000 of the sales.
f. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2.
g. Paid $5,700 for warranty repairs during the year.
h. Paid operating expenses of $54,500 for the year.
i. Paid $125,300 of accounts payable.
j. Recorded accrued interest on the note issued in transaction no. 6.

Required:
Prepare the income statement, balance sheet, and statement of cash flows for Year 1.