The following selected transactions were taken from the books of Ripley Company for Year 1: 1. On February 1. Year 1, borrowed $54,000 cash from the local bank. The note had a 7 percent interest rate and was due on June 1, Year 1 2. Cash sales for the year amounted to $250,000 plus sales tax at the rate of 7 percent 3. Ripley provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 2 percent of sales. 4. Paid the sales tax to the state sales tax agency on $210,000 of the sales 5. Paid the note due on June 1 and the related interest 6. On November 1 Year 1, borrowed $45,000 cash from the local bank. The note had a 8 percent interest rate and a one-year term to maturity 7. Paid $3,200 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $120,000 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. Post the abilities transactions to T-accounts and prepare the current liabilities section of the balance sheet at December 31, Year 1. c. In the Cash Flow column, indicate whether the item is an inflow or outflow and if 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. Required A1 Required A2 Required A3 Required B1T Required B2 Account Bal Sheet Required What amount of cash did Ripley pay for interest during Year 1? (Round your answer nearest dollar amount.) Cash paid for interest (Required A1 Required A2 > tatement your amount.) Interest expense cequired Account Bal Sheet What is the amount of warranty expense for Year 1? Warranty expense 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. Warranty Payable Notes Payable Beg. Bal. Beg. Bal. End. Bal End. Bal. amount RIPLEY COMPANY Balance Sheet (partial) As of December 31, Year 1 Current liabilities Total current liabilities