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Question: The following selected transactions were taken from the books of Ripley Company for 2018: 1. ...

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 in- terest 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.

Event	Assets	=	Liab.	+	Equity		Rev.	-	Exp.	=	Net Inc.		Cash Flow
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