3 Problem 9-22A Current liabilities LO 9-1, 9-2, 9-3, 9-4 The following selected transactions were taken from the books of Ripley Company for Year 1 oints 1. On February 1, Year 1, borrowed $51,000 cash from the local bank. The note had a 8 percent interest rate and was due on June 1, Skipped Year 1 2. Cash sales for the year amounted to $220.,000 plus sales tax at the rate of 5 percent. 3. Ripley provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 3 percent of sales. $185,000 of the sales. 5, Paid the note due on June 1 and the related interest 6. On November 1. Year 1, borowed $39,000 cash from the local bank. The note had a 7 percent interest rate and a one-year term to maturity. eBook Paid $3.20 re against Ripley for $80,000 for breach of contract. The company attorney does not believe the suit Ask has merit Print Required 0. Answer the following questions: 1. What amount of cash did Ripley pay for interest during Year 1? 2. What amount of interest expense is reported on Ripley's income statement for Year 1? References h Post the liabilities transactions to Taccounts and prepare the current liabilities section of the balance sheet at December 31, Year 1. c. Show the effect of these transactions on the financial statements using a horizontal statements model like the one shown next. Use for increase, for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA). investing activity (IA), or financing activity (FA) or not affected (NA). The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Rec Account B1 Re Ral sheet Required A1 Required A2 Required A3 Required C What amount of cash did Ripley pay for interest during Year 1? (Round your answer nearest dollar amount.) Cash paid for interest Required A2 > Complete this question by entering your answers in the tabs below equired B2 Bal Sheet Required B1 T Required A2 Required A1 Required A3 Required C Account What amount of interest expense is reported on Ripley's income statement for Year 1? (Round your answer nearest dollar amount.) Interest expense Required A1 Required A3 > Complete this question by entering your answers in the tabs below. Required B1 T Account Required B2 Bal Sheet Required A1 Required A2 Required A3 Required C What is the amount of warranty expense for Year 1? Warranty expense Required A2 Required B1 T Account Complete this question by entering your answers in the tabs below Required B1 T Required B2 Bal Sheet Required A1 Required A2 Required A3 Required C Account Post the liabilities transactions to T-accounts at December 31, Year 1 Interest Payable Sales Tax Payable Beg. Bal Beg. Bal. End. Bal End. Bal. Notes Payable Warranty Payable Beg Bal Beg. Bal End. Bal. Bal. Required B2 Bal Sheet Required A3 Complete this question by entering your answers in the tabs below. Required B1 T Required B2 Bal Sheet Required A1 Required A3 Required C Required A2 Account Show the effect of these transactions on the financial statements using a horizontal statements model like the one shown next. Use +for increase, for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) or not affected (NA). The first transaction has been recorded as an example. Show less Net Income Event Assets Liabilities + Equity Revenue Expense Cash Flow 1, NA NA NA NA FA + + + 3 4 = 5 6 7 8