1.The business was started when Kershaw Corp. received 2. Purchased $1,900,000 of merchandise on account. 3. Sold merchandise for $650,000 from the issue of common stock $2,400,000 cash (not including sales tax). Sales tax of 8% is collected when the merchandise is sold. The merchandise had a cost of Good idea to split this into two accounting entries - think chapter 3 $1,450,000 4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 3% of merchandise sales 5% 5.Paid the sales tax of 6. On September 1, 2018, borrowed to the state agency on $1,600,000 of the sales $250,000 from the local bank. The note had a 5% annual interest rate and matures on August 31, 2019 Paid Paid 7 8 9 Paid 10. Recorded accrued interest payable at the end of the year or 12/31 $1,360,000 of accounts payable $40,000 for warranty repairs during the year. $620,000 cash in operating expenses for the year REQUIRED a. Record the above transactions in a horizontal statements model b. Prepare the income statement, balance sheet, and statement of cash flows for 2018 C. What is the total amount of current liabilities at December 31, 2018