Worksheet Problem - Chapter 10 Prepare the journal entries for High Tech, Inc. for the following economic transactions. Post the transactions on the T Accounts and prepare the financial statements. Note: the T-accounts have beginning balances from the December 31, 2018 balance sheet shown below. Include these amounts in your computations. Assets Cash Accounts Receivable Inventory Total Assets $21,000 20,000 39,000 $80.000 Liabilities & Equity Accounts Payable Common Stock Retained Earnings Total Equity $31,000 15,000 34,000 $80.000 1 1/1/19 The company borrowed $10,000 from the bank. They signed a 180 day note with an interest rate of 6%. 1/3/19 The company received a shipment of inventory. The enclosed invoice is for $66,000. 1/31/19 The company billed customers for $75,000 of merchandise delivered to customers during the current month. The company was required to charge 5% sales taxes on all sales. 4 1/31/19 The cost of goods sold for the month was $42,000. 5 1/31/19 The company prepares its financial statements under GAAP. As such, it uses the allowance for bad debt method. It estimates that bad debts will equal 2% of sales. 6 1/31/19 Based on experience, the estimated future warranty costs on the merchandise sold will be equal to 3% of the sales price. 7 1/31/19 The company collected $8,000 of the outstanding accounts receivable. 8 1/31/19 The company paid $17,000 of its outstanding accounts payable invoices. 9 1/31/19 The company accrues interest expense payable on its bank loan. The bank follows federal mandates and uses 365 days in the year to compute interest income. Round to the nearest whole dollar. General Journal Entry Description (Account/Explanation) Debit Credit Date 1/1/19 1/3/19 3 1/31/19 Accounts Receivable Sales Sales Taxes Payable HHHHHH 4 arlobal 1/31/19 1/31/19 1/31/19 Warranty Expense 1/31/19 1/31/19 - 8 1/31/19 Asset Accounts Liability Accounts Equity Accounts Revenue Accounts Expense Accounts Cash Accounts Payable 1. Common Stock Sales Cost of Goods Sold Dahit Credit Debit Croat Debi Dobit Credit Debit Credit Beg. 21,000 Beg. 31,000 Beg. 15,000 Retained Earnings - Beginning of Year Note Payable Debit Beg. 34,000 | Accounts Receivable ceivable edit Beg. 20,000 Note that the amounts from the beginning of the year balances total to 0. The debits equal the credits. The prior year income and expense accounts were "zeroed out" and "closed" into Retained Earnings. Inventory Beg. 39,000