At the beginning of Year 2, the Redd Company had the following balances in its accounts Cash $ 6,900 Inventory 15,000 Land 7,000 Common stock 15,000 Retained earnings 13,900 During Year 2, the company experienced the following events 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 Returned $400 of the inventory it had purchased from Ross Company 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 Ross Company within the cash discount period Sold inventory that had cost $6,800 for $12,100 on account, under terms 2 10, n 45 Received merchandise returned from a customer The merchandise originally cost $900 and was sold to the customer for $1,680 cash The customer was paid $1,680 cash for the returned merchandise Delivered goods FOB destination in Event 4 Freight costs of $140 were paid in cash Collected the amount due on the account receivable within the discount period Sold the land for $8,500 Recognized accrued interest income of $600 Took a physical count indicating that $13,400 of inventory was on hand at the end of the accounting period ( Hint Determine the current balance in the inventory account before calculating the amount of the inventory write down ) c Post the beginning balances and the events to the T accounts Note that these ledger accounts will also be used when posting the closing entry that is created in Part e

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Posted on Sep 18, 2024

At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash $ 6,900 Inventory 15,000 Land 7,000 Common stock

At the beginning of Year 2, the Redd Company had the following balances in its accounts:


Cash	$	6,900
Inventory		15,000
Land		7,000
Common stock		15,000
Retained earnings		13,900

During Year 2, the company experienced the following events:

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.
Returned $400 of the inventory it had purchased from Ross Company 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 Ross Company within the cash discount period.
Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10, n/45.
Received merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $1,680 cash. The customer was paid $1,680 cash for the returned merchandise.
Delivered goods FOB destination in Event 4. Freight costs of $140 were paid in cash.
Collected the amount due on the account receivable within the discount period.
Sold the land for $8,500.
Recognized accrued interest income of $600.
Took a physical count indicating that $13,400 of inventory was on hand at the end of the accounting period. (Hint: Determine the current balance in the inventory account before calculating the amount of the inventory write down.)

c. Post the beginning balances and the events to the T-accounts. Note that these ledger accounts will also be used when posting the closing entry that is created in Part e.