At the beginning of 2018, the Redd Company had the following balances in its accounts Cash $ 8,200 Inventory 2,200 Common stock 7,700 Retained earnings 2,700 During 2018, the company experienced the following events Purchased inventory that cost $5,700 on account from Redd Company under terms 2 10, n 30 The merchandise was delivered FOB shipping point Freight costs of $520 were paid in cash Returned $350 of the inventory that it had purchased because the inventory was damaged in transit The seller agreed to pay the return freight cost Paid the amount due on its account payable to Redd Company within the cash discount period Sold inventory that had cost $6,200 for $9,200 on account, under terms 2 10, n 45 Received merchandise returned from a customer The merchandise originally cost $520 and was sold to the customer for $820 cash The customer was paid $820 cash for the returned merchandise Delivered goods FOB destination in Event 4 Freight costs of $620 were paid in cash Collected the amount due on the account receivable within the discount period Took a physical count indicating that $1,900 of inventory was on hand at the end of the accounting period Record each event in a statements model like the following one In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash If the element is not affected by the event, leave the cell blank The first event is recorded as an example Balance Sheet Income Statement Statement of Cash Flows Assets Liabilities Stockholders Equity Revenue Expenses Net Income Cash Accounts Receivable Merchandise Inventory Accounts Payable Common Stock Retained Earnings Bal 8,200 2,200 7,700 2,700

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 06, 2024

At the beginning of 2018, the Redd Company had the following balances in its accounts: Cash $ 8,200 Inventory 2,200 Common stock 7,700 Retained earnings

At the beginning of 2018, the Redd Company had the following balances in its accounts:


Cash	$	8,200
Inventory		2,200
Common stock		7,700
Retained earnings		2,700

During 2018, the company experienced the following events:

Purchased inventory that cost $5,700 on account from Redd Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $520 were paid in cash.
Returned $350 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost.
Paid the amount due on its account payable to Redd Company within the cash discount period.
Sold inventory that had cost $6,200 for $9,200 on account, under terms 2/10, n/45.
Received merchandise returned from a customer. The merchandise originally cost $520 and was sold to the customer for $820 cash. The customer was paid $820 cash for the returned merchandise.
Delivered goods FOB destination in Event 4. Freight costs of $620 were paid in cash.
Collected the amount due on the account receivable within the discount period.
Took a physical count indicating that $1,900 of inventory was on hand at the end of the accounting period.

Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example.

Balance Sheet

Income Statement

Statement of Cash Flows

Assets

Liabilities

Stockholders Equity

Revenue

Expenses

Net Income

Cash

Accounts Receivable

Merchandise Inventory