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At the beginning of Year Z the Redd Company had the following balances in its accounts During Year 2, the company experienced the following events

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At the beginning of Year Z the Redd Company had the following balances in its accounts During Year 2, the company experienced the following events 1. Purchased inventory that cost $5,200 on account from Ross Company under terms 1/10,n/30. The meichandive was delivered Foe shepping point fietioht costs of 5 tho were paid in cash 2. Returned $400 of the inveritory it had purchaned because the inventory was dameged in wansit. The selier agreed to pay the refurn freight cost 3. Paid the amount due on its account payable to Ross Company within the cash discount period 4. Sold imvertory that had cost $6.300 for $12.100 on account, under teris 270,n/45 5. Received mercbandise retumed from a customer. The merchandise originally cost $900 and was sold to the customer for $1,680 cash. The customer wos paid $1,690 cash for the returned merchandise 6. Delivered goods FOB destination in Event 4 Freight costs of $140 were paid in cash. 7. Collected the amount due gn the account recervable within the discount period 8. Soid the land for 58,500 . 9. Recognized accrued interest income of $600 10. Took a physical count indicating that $13,400 of inventory wos on hand at the end of the accounting period Hant Determine the current balance in the inventory account before calculating the amount of the inventory write down a. Identify each of these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each event would affect the financial statements by placing a + for increase, - for decrease, and +1 - for increase and decrease under each of the components in the following statements model. Assume that the perpetual inventory method is used. When an event has more than one part, use letters to distinguish the effects of each part, The first event is recorded as an example b. Record the events in general journal format. Assume that the perpetual inventory method and gross method is used. 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. 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 e: Use a single general journal entry to close all revenue, gain, and expense accounts to the retained earnings account: Post the journal entry to the ledger accounts and prepare a post-closing trial balance

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