Che Problem 3-26A (Algo) Comprehensive cycle problem: Perpetual system LO 3-2, 3-3, 3-4, 3- 5, 3-6, 3-7 [The following information applies to the questions displayed below.) At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $8,300 2,300 7,800 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 2/0,n/30. The merchandise was delivered FOB shipping point. Freight costs of $530 were paid in cash. 2. Returned $300 of the inventory that 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. Problem 3-26A (Algo) Part 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. Complete this question by entering your answers in the tabs below. Reg C1 Reg C2 Req c3 Reg C4 Prepare a multistep Income statement. REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Required information ReqC1 Reg C2 Reg C3 Reg C4 Prepare a multistep income statement. REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Operating expenses Req C2 > Req C1 Reg C2 Req C3 Req C4 Prepare a statement of changes in stockholders' equity. REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity Req c1 Req C2 Reg C3 Reg 04 Prepare a balance sheet. REDD COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Reg C1 Req C2 Req C3 Req C4 Prepare a statement of cash flows. (Cash outflows should be indicated with a minus sign.) REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities: Cash flows from financing activities: Net change in cash Ending cash balance Problem 3-26A (Algo) Part b b. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. (Not every cell will require entry, Enter any decreases to account balances and cash outflows with a minus sign.) Income Statement REDD COMPANY Horizontal Statements Model - Year 2 Balance Sheet = Liabilities Stockholders' Equity Merchando Accounts Common Inventory Payable Stock Earnings 2.300 = 7,800+ 2,800 Statement of Flows Net Income Expenses Assets Accounts Receivablo Event Retained Revenue Cash Bal 8,300+ + - + ta +++ + + 1b. 4 5 Next > of 5