The following transactions apply to Knight Corp. for 2018: 1. 2. The business was started when Knight Corp. received Purchased $950,000 of merchandise on account. 3. 4. 5. Sold merchandise for $325,000 from the issue of common stock. $1,200,000 cash (not including sales tax). Sales tax of 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. Hint: 3a and 3b Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty payable claims would amount to Paid the sales tax of 3% 8% $725,000 of merchandise sales excluding sales tax. Think of it as a contingent liability $800,000 of the sales, (not the entire amount) 8% to the state agency on