At the beginning of Year $2,$ the Red Company had the following balances in its accounts:CashInventoryCommon stockRetained earnings$ $16,90025,00030,00011,900$During Year $2,$ the company experienced the following events:$1.$ Purchased inventory that cost $$15,200$ on account from Ross Company under terms $1/10,$ n$/30.$ The merchandise was delivered FOB shipping point. Freight costs of $$200$ were paid in cash$2.$ Returned $$800$ of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost$\mathrm{.}3.$ Paid the amount due on its account payable to Ross Company within the cash discount period$\mathrm{.}4.$ Sold inventory that had cost $$18\mathrm{.}000$ for $$32\mathrm{.}000$ on account, under terms $2/10,$ n$/45\mathrm{.}5.$ Received merchandise returned from a customer. The merchandise originally cost $$800$ and was sold to the customer for $$1\mathrm{.}500$ cash. The customer was paid $$1\mathrm{.}500$ cash for the returned merchandise$\mathrm{.}6.$ Delivered goods FOB destination in Event $4.$ Freight costs of $$140$ were paid in cash$\mathrm{.}7.$ Collected the amount due on the account receivable within the discount period$\mathrm{.}8.$ Took a physical count indicating that $$21100$ of inventory was on hand at the end of the accounting period.