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

Cash	$	16,300
Inventory		6,500
Land		2,500
Common stock		14,000
Retained earnings		11,300

During Year 2, the company experienced the following events:

1. Purchased inventory that cost $11,700 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $850 were paid in cash.
2. Returned $700 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.
3. Paid the amount due on its account payable to Ross Company within the cash discount period.
4. Sold inventory that had cost $9,000 for $15,000 on account, under terms 2/10, n/45.
5. Received merchandise returned from a customer. The merchandise originally cost $1,450 and was sold to the customer for $2,600 cash. The customer was paid $2,600 cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $740 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Sold the land for $4,500.
9. Recognized accrued interest income of $500.
10. Took a physical count indicating that $7,000 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.)

Answer is not complete. No Event Credit 18 General Journal Merchandise inventory Accounts payable Debit 11,700 11,7009 16 Transportation-out Cash 850 02 Accounts payable Merchandise inventory Accounts payable Cash 3b Cash Accounts payable 6 4a Accounts receivable Sales revenue 15,0000 7 4 6 Sales revenue Cost of goods sold 66 666 38 36 36 68 38 SC 6 C6 & OG 9,000 8 5 a Sales returns and allowances Cash 2,600 9 5 b M erchandise inventory Sales returns and allowances 1,450 06 Transportation-out Cash 740 7a Cash Sales discounts 1308 Cash Land Gain on sale of land 4,500X 14 09 Interest receivable Interest revenue 5000 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. Cash Merchandise Inventory Beg. Bal Beg. Bal End. Bal End. Bal I Bal Accounts Receivable Interest Receivable Beg. Bal Beg. Bal End. Bal End. Bal Land Accounts Payable Beg. Bal Beg. Bal End. Bal End. Bal Common Stock Retained Earnings Beg. Bal Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold d. Prepare a multistep income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for year 2. (Statement of Cash Flows only, Items to be deducted must be Indicated with a minus amount.) REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Operating expenses Nonoperating items D REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Total stockholders' equity 0 REDD COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Ending cash balance e. Use a single general journal to close all revenue, gain, and expense accounts to the retained earnings account. Post the journal entry to the ledger accounts created in Part cand prepare a post-closing trial balance. (If no entry is requlred for a transaction/event, select "No Journal entry required" In the first account field.) View transaction list Journal entry worksheet Record entry to close all revenue, gain, and expense accounts to the retained earnings account. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal REDD COMPANY Post Closing Trial Balance December 31, Year 2 Account Titles Debit Credit $ 0 $