Question

The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: Inventory that...

The following information was drawn from the Year 1 accounting records of Ozark Merchandisers:

  1. Inventory that had cost $25,800 was sold for $43,860 under terms 2/20, net/30.
  2. Customers returned merchandise to Ozark five days after the purchase. The merchandise had been sold for a price of $1,848. The merchandise had cost Ozark $1,120.
  3. All customers paid their accounts within the discount period.
  4. Selling and administrative expenses amounted to $4,386.
  5. Interest expense paid amounted to $390.
  6. Land that had cost $7,800 was sold for $10,530 cash.


Required
a. Determine the amount of net sales. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)



b. Prepare a multistep income statement. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Amounts to be deducted and losses should be indicated with a minus sign.)



c. Where would the interest expense be shown on the statement of cash flows?

  • Operating activities

  • Investing activities

  • Financing activities



d. How would the sale of the land be shown on the statement of cash flows?

  • The full sales price of the land, $10,530, would be shown as a cash inflow from financing activities on the statement of cash flows.

  • The full sales price of the land, $10,530, would be shown as a cash inflow from investing activities on the statement of cash flows.

  • The full sales price of the land, $10,530, would be shown as a cash inflow from operating activities on the statement of cash flows

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