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4. Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10,n/45. 5. Recelved merchandise returned from a customer. The merchandise oilginally cost

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4. Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10,n/45. 5. Recelved merchandise returned from a customer. The merchandise oilginally cost 5900 and was sold to the customer for $1,680 cash. The customer was paid $1,680 cash for the retumed merchandise 6. Delivered goods FOB destination in Event 4. Freight costs of $140 were paid in cash 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $8,500 9. Recognized accrued interest income of $600, 10. Took a physical count indicating that $13,400 of inventory was on fiand at the end of the accounting period. Hinc. Determine the current balance in the inventory account before calculating the amount of the invertory write down Required: a. Identify each of these events as asset source (AS), asset use (AU), asset excharge (AE), or clalms exchange (CE) Also explain how each event would affect the firiancial statements by placing a + fot increase, for decrease, and +1 - for increase and decrease under each of the components in the following statements model Assume that the perpetyal inventory method is used. When an event has more than one part use lettets to distingulsh the effects. of each part. The first event is recorded as an example. b. Record the events ingeneral jourrial format. Assume that the perpetual inventory method and gross method is used c. Post the beginning balances and the events to the T-accounts Note that these ledget accounts will also be used when posting the closing entry that is created in Part e. d. Prepare a muitistep income statement, a stotement of changes in stockholders' equity, a balance sheet, and a statement of cash thows for Year 2 e. Use a single general joumal entry to close all revenue, gain, and expense accounts to the retained eamings account. Post the lournot entry to the ledgef accounts and prepare a post-closing thal balance. Complete this question by entering your onswers in the tabs below. Identify each of these nvents as assit soutce (AS), asset use (AU), atoet oxchange (AE), ot claims exchange (CE), Afso explain how each event would affect the finandil statements by placing a+ fot increase, - foc decrease, and +f - for increase and decrease undor each of the cotnponents in the tollowieng statements medel. Assume that the perpetual fruentory method is uged, When an event has more than one part, use letters to dilatinguish the effects of asch part. The flist ovent is recordod as an example. (in the statement of cash riowo column, usin the initials oA to detignate operating At the beginning of Year 2, the Redd Company had the following balances in its accounts. During Year 2, the company experlenced the following events: 1. Purchased inventory that cost $5,200 on account from Ross Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash. 2. Retumed $400 of the inventory it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Ross Company within the cash discount period 4. Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10,n/45. 5. Recelved merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $1,680cash. The customer was paid $1,680 cash for the returned merchandise. 6. Dellvered goods FOB destination in Event 4 . Frelght costs of $140 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $8,500. 9. Recognized accrued interest income of $600. 10. Took a physical count indicating that $13,400 of inventory was on hand at the end of the accounting period. Hint

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