Required information (The following information applies to the questions display

Question

Required information (The following information applies to the questions displayed below At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $8,800 2,800 8,300 3,38a During Year 2, the company experienced the following events 1. Purchased inventory that cost $6.300 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point Freight costs of 2 Returned $400 of the inventory it had purchased because the inventory was 3. Paid the amount due on its account payable to Ross Company within the cash 4. Sold inventory that had cost $6.800 for $9.800 on account, under terms 2/10 5. Received merchandise returned from a customer The merchandise originally cost 6. Delivered goods FOB destination in Event 4 Freight costs of $680 were paid in 7. Collected the amount due on the account receivable within the discount period $580 were paid in cash. damaged in transit. The seller agreed to pay the return freight cost discount period n/45 $580 and was sold to the customer for $880 cash. The customer was paid $880 cash for the returned merchandise cash. 8. Took a physical count indicating that $2,500 of inventory was on hand at the end of the accounting period c-1. Prepare a multistep income statement c-2. Prepare a statement of changes in stockholders equity c-3. Prepare a balance sheet c-4. Prepare a statement of cash flows

Explanation / Answer

In the books of Redd Company:

c-1. Income Statement:

c-2. Statement of Changes in Stockholders Equity:

c-3. Balance Sheet:

Transaction / Event Account Titles Debit Credit $ $ 1. Inventory 6,300 Accounts Payable 6,300 1. Inventory 580 Cash 580 2. Accounts Payable 400 Inventory 400 3. Accounts Payable 5,900 Inventory 118 Cash 5,782 4. Accounts Receivable 9,800 Sales 9,800 4. Cost of Goods Sold 6,800 Inventory 6,800 5. Sales Returns and Allowances 880 Cash 880 5. Inventory 580 Cost of Goods Sold 580 6. Shipping Costs 680 Cash 680 7. Cash 9,604 Sales Discount 196 Accounts Receivable 9,800 8. Cost of Goods Sold 442 Inventory 442

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.