The following transactions were taken from the books of Sanchez Co. for 2017:

- On February 1, 2017 borrowed $70,000 cash from the local bank. The note had a 6% interest rate and was due on June 30, 2017

- Cash sales for he year amounted to $240,000 plus sales tax at a rate of 6%.

- Sanchez provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 1% of sales.

- Paid the sales tax to the state sales tax agency on $210,000 of the sales.

- Paid the note due on June 30 including the related interest

- On November 1, 2017, borrowed $20,000 cash from the local bank. The note had a 6% interest rate and a one year term to maturity.

- Paid $2,100 in warranty repairs

- A customer has filed a lawsuit against Ripley for $1 million for breach of contract. The company attorney does not believe the suit has any merit.

REQUIRED

A) Answer the following questions:

- What amount of cash did Sanchez pay for interest in 2017?

- What amount of interest expense is reported on Sanchez's income statement for 2017?

- What is the amount of warranty expense for 2017?

B) Prepare the Current Liabilities portion of the balance sheet at December 31, 2017 (T-Accounts might help!)