The following information was drawn from the Year 1 accounting records of Ozark Merchandisers: 1. Inventory that had cost $15,600 was sold for $23,400 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 $550. The merchandise had cost Ozark $440.
3. All customers paid their accounts within the discount period.
4. Selling and administrative expenses amounted to $2,340.
5. Interest expense paid amounted to $210.
6. Land that had cost $6,100 was sold for $7,320 cash.
Required:
A. Determine the amount of net sales.
B. Prepare a multistep income statement.
C. Where would the interest expense be shown on the statement of cash flows?
1. Operating activities.
2. Investing activities.
3. Financing activities.
D. How would the sale of the land be shown on the statement of cash flows? `
1. The full sales price of the land, $10,585, would be shown as a cash inflow from financing activities on the statement of cash flows.
2. The full sales price of the land, $10,585, would be shown as a cash inflow from investing activities on the statement of cash flows.
3. The full sales price of the land, $10,585, would be shown as a cash inflow from operating activities on the statement of cash flows.