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

Cash	$	8,300
Inventory		2,300
Common stock		7,800
Retained earnings		2,800

During Year 2, the company experienced the following events:

1. Purchased inventory that cost $5,800 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $530 were paid in cash.

2. Returned $300 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 $6,300 for $9,300 on account, under terms 2/10, n/45.

5. Received merchandise returned from a customer. The merchandise originally cost $530 and was sold to the customer for $830 cash. The customer was paid $830 cash for the returned merchandise.

6. Delivered goods FOB destination in Event 4. Freight costs of $630 were paid in cash.

7. Collected the amount due on the account receivable within the discount period.

8. Took a physical count indicating that $2,000 of inventory was on hand at the end of the accounting period.

Prepare a multi-step income statement and a statement of cash flows

Reg CReg CaRea c3Reg Ca Req C3 Prepare a multistep income statement. REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Net sales $ 9,300 -m101 (830) ICost of goods sold' IT Gross margin 2.250 Ga Operating expenses Transportation-out Net income 1434