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At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash8,200Inventory2,200Common stock7,700Retained earnings2,700 During Year 2, the company experienced
At the beginning of Year 2, the Redd Company had the following balances in its accounts:
Cash8,200Inventory2,200Common stock7,700Retained earnings2,700During Year 2, the company experienced the following events:
- Purchased inventory that cost $5,700 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Transportation costs of $520 were paid in cash.
- Returned $350 of the inventory it had purchased because the inventory was damaged in transit. The seller agreed to pay the return transportation cost.
- Paid the amount due on its account payable to Ross 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. Transportation 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.
c-1. Prepare a multistep income statement.
c-2. Prepare a statement of changes in stockholders equity.
c-3. Prepare a balance sheet.
c-4. Prepare a statement of cash flows.
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