8. A customer has filed a lawsuit against Ripley for $13 million for breach of contract. The company attorney does not believe the suit has merit. Required a. 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? 3. What is the amount of warranty expense for Year 1 ? b. 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 below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Prepare the current liabilities section of the balance sheet at December 31, Year 1 . (Do not round intermediate calculations.) 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 ? 3. What is the amount of warranty expense for Year 1 ? b. 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 below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Show the effect of these transactions on the financial statements using a horizontal statements model like the one below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. (Not all cells will require entry.) 8. A customer has filed a lawsuit against Ripley for $13 million for breach of contract. The company attorney does not believe the suit has merit. Required a. 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? 3. What is the amount of warranty expense for Year 1 ? b. 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 below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Prepare the current liabilities section of the balance sheet at December 31, Year 1 . (Do not round intermediate calculations.) 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 ? 3. What is the amount of warranty expense for Year 1 ? b. 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 below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Show the effect of these transactions on the financial statements using a horizontal statements model like the one below. Use + for increase, - for decrease, and leave the cell blank if there is no effect. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction has been recorded as an example. (Not all cells will require entry.)