Reference no: EM132515383
Question - The following selected transactions were taken from the books of Ripley Company for 2018:
1. On February 1, 2018, borrowed $70,000 cash from the local bank. The note had a 6 percent interest rate and was due on June 1, 2018.
2. Cash sales for the year amounted to $240,000 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 1 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, 2018, 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 -
1. a. Answer the following questions:
2. 1. What amount of cash did Ripley pay for interest during 2018?
3. 2. What amount of interest expense is reported on Ripley's income statement for 2018?
4. 3. What is the amount of warranty expense for 2018?
5. b. Prepare the current liabilities section of the balance sheet at December 31, 2018.
6. 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.
How much income is reported under absorption costing
: 6,000 units in inventory,Income calculated under variable costing is determined to be $330,000. How much income is reported under absorption costing?
|
Discuss what unconsciousness
: Discuss what unconsciousness is and how it relates to symptoms exhibited by clients that are not organic in nature (medically explained).
|
Multiple advertisements for a product
: Some companies use Top of Mind advertising strategies to make sure a customer is constantly exposed to multiple advertisements for a product
|
What value of ending inventory under variable costing
: The company produced 33,000 units, and sold 27,000 units, leaving 6,000 units in inventory at year- end. What value of ending inventory under variable costing?
|
What amount of cash did Ripley pay for interest
: Ripley provides a 90-day warranty on merchandise sold. The warranty expense is estimated to be 1 percent of sales. What amount of cash Ripley pay for interest
|
What is the amount of working capital and the current ratio
: What is the amount of working capital and the current ratio at the end of this year? (Round "Current ratio" to 2 decimal places.)
|
Compute the depreciation expense for each of the seven years
: Banger Co. purchased delivery equipment for $56,000 on January 1, 2018. Compute the depreciation expense for each of the seven years
|
Compute the amount of depletion that should be recorded
: Frederick extracted and sold 145,000 tons of ore. What is the amount of depletion that should be recorded? Round total the nearest whole dollar
|
Completion of the task checks to make sure
: Nancy is a high-achieving and thoughtful student who carefully budgets her time. Before beginning a task, she lists out her goals and the task requirements
|