Question 1 A,B,C

The Tusquittee Company is a retail company that began operations on October 1, 2018, when it incorporated in the state of North Carolina. The Tusquittee Company is authorized to issue 100,000 shares of $1 par value common stock and 50,000 shares of 5%, $50 par value preferred stock. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. Customers are charged a 6% state sales tax. The company uses a perpetual inventory system. There are three employees that are paid a monthly salary on the last day of the month. Following is the chart of accounts for The Tusquittee Company. As a new business, all beginning balances are $0. The Tusquittee Company Chart of Accounts Cash Merchandise Inventory Land Building Store Fixtures Accumulated Depreciation Accounts Payable Employee Income Taxes Payable Dividends Payable-Common Notes Payable Mortgages Payable Common Stock -$1 Par Value Paid-In Capital in Excess of Par Common Paid-In Capital from Treasury Stock Transactions Retained Earnings Treasury Stock Common