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The following selected transactions were taken from the books of Ripley Company for Yeart 1. On February 1, Yeart borrowed $70.000 cash from the local bank. The note had a 6 percent interest rate and was due on June 1 Year 1 2. Cash sales for the year amounted to $240,000 plus sales tax at the rate of 7 percent 3. Ridley provides a 90-day warranty on the merchandise sold The warranty expense is estimated to be 1 percent of sales 4. Pald the sales tax to the state sales tax agency on $210,000 of the sales 5. Pald the note due on June 1 and the related interest 6. On November 1 Year 1, borrowed $20,000 cash from the local bank The note had a 6 percent interest rate and a one-year term to maturity 7. Paid $2.100 in warranty repairs, 8. A customer has filed a lawsuit against Ripley for $1 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? 2. What amount of interest expenses reported on Ripley's income statement for Year 1 3. What is the amount of warranty expense for Year 1? b. Prepare the current abilities section of the balance sheet at December 31. Year 1 c. Show the effect of these transactions on the financial statements using a hortzontal statements modelike the one below. Use for increase or for decrease. In the Cash Flow column, indicate whether the nem is an operating activity (OA). Investing activity (A), or financing activity (FA) Columns for events that have no effect on any of the elements should be left blank. The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Required A Haqida Fequired Show the effect of these transactions on the financial statement van hartement model the one below. Use for Increase or - for decrease in the cash flow volume, indicate what the operating activity (Avesting activity (1), Financing activity). Columns for events that have no effect of the method of the far transaction has been recorded. Not all will be an input) Show less MILEY COMPANY Homens CA . 2 2 FA OA . OA FA FA 7