The following transactions apply to Ozark Sales for 2016:

1. The business was started when the company received $50,000 from the issue of common stock.

2. Purchased equipment inventory of $380,000 on account.

3. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000.

4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales.

5. Paid the sales tax to the state agency on $400,000 of the sales.

6. On September 1, 2016, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, 2017.

7. Paid $6,200 for warranty repairs during the year.

8. Paid operating expenses of $78,000 for the year.

9. Paid $250,000 of accounts payable.

10. Recorded accrued interest on the note issued in transaction no. 6.

Required:

a. Prepare the income statement for 2016.

b. Prepare the balance sheet for 2016.

c. Prepare the statement of cash flows for 2016.