Lopez Company sells chairs that are used at computer stations. Its beginning inventory of chairs in Year $1$ was $100$ units at $$60$ per unit. During the year, Lopez made two purchases of this chair. The first was a $150$units purchase at $$68$ per unit; the second was a $200-$unit purchase at $$72$ per unit. During Year $1,$ it sold $270$ chairs at $$120$ each.

During Year $2,$ Lopez made two additional purchases of this chair. The first was a $100-$unit purchase at $$73$ per unit; the second was a $300-$unit purchase at $$75$ per unit. During Year $2,$ it sold $215$ chairs at $$125$ each.

Lopez applies the FIFO cost flow assumption.

$12$ points

What is the amount of COGS Lopez should report for Year $1?$

$$17,640$

$$32,400$

$$16,200$

$$19,440$

$2$ points

What is the amount of gross profit Lopez should report for Year $1?$

$$32,440$

$$19,440$

$$12,960$

$$14,760$

$3$

$2$ points

What is the amount of ending inventory Lopez should report for Year $1?$

Bill Darby started Darby Company on January $1,$ Year $1.$ The company experienced the following events during its first year of operation:

Earned $$1,300$ of cash revenue.

Borrowed $$2,000$ cash from the bank.

Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September $1,$ Year $1,$ had a one$-$year term and an $10$ percent annual interest rate.

Required:

a$.$ What is the amount of interest expense in Year $1?$

b$.$ What amount of cash was paid for interest in Year $1?$

c$.$ Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases, decreases, or increases and decreases each element of the financial statements. In the Statement of Cash Flows column, designate the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$ The first transaction has been recorded as an example.

Complete this question by entering your answers in the tabs below.

Req A and $B$

a$.$ What is the amount of interest expense in Year $1?$

b$.$ What amount of cash was paid for interest in Year $1?$

Note: Do not round intermediate calculations.

a$.$ Interest expense

b$.$ Cash paid for interest