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The following selected transactions were taken from the books of Ripley Company for Year 1 1. On February 1, Year 1, borrowed $58,000 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 $225,000 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 4 percent of sales 4. Paid the sales tax to the state sales tax agency on $180,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $44,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity 7. Paid $3,600 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $10 million for breach of contract. The company attorney does not believe the suit has merit.

The following selected transactions were taken from the books of Ripley Company for Year 1 1. On February 1, Year 1, borrowed $58,000 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 $225,000 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 4 percent of sales 4. Paid the sales tax to the state sales tax agency on $180,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $44,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity 7. Paid $3,600 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $10 million for breach of contract. The company attorney does not believe the suit has merit.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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Subject:Accounting

The following selected transactions were taken from the books of Ripley Company for Year 1 1. On February 1, Year 1, borrowed $58,000 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 $225,000 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 4 percent of sales 4. Paid the sales tax to the state sales tax agency on $180,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $44,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity. 7. Paid $3,600 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $10 million for breach of contract. The company attorney does not believe the suit has merit.
Transcribed Image Text:The following selected transactions were taken from the books of Ripley Company for Year 1 1. On February 1, Year 1, borrowed $58,000 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 $225,000 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 4 percent of sales 4. Paid the sales tax to the state sales tax agency on $180,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $44,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity. 7. Paid $3,600 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $10 million for breach of contract. The company attorney does not believe the suit has merit.
Prepare the current liabilities section of the balance sheet at December 31, Year 1. RIPLEY COMPANY Balance Sheet (Partial) As of December 31, Year 1 Current liabilities Total current liabilities
Transcribed Image Text:Prepare the current liabilities section of the balance sheet at December 31, Year 1. RIPLEY COMPANY Balance Sheet (Partial) As of December 31, Year 1 Current liabilities Total current liabilities
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