He Le IUIUWhy nour appre cu ule que SLOTIS UISpidytu veru. At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash Inventory Common stock Retained earnings $16,900 25,000 30,000 11,900 During Year 2, the company experienced the following events: 1. Purchased inventory that co $15,200 on acco from Ross Company under terms 1/10,n/30. The merchandise w delivered FOB shipping point. Freight costs of $200 were paid in cash. 2. Returned $800 of the inventory that it had purchased because the inventory was damaged in transit. The seller as 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 $18,000 for $32,000 on account, under terms 2/10,n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $800 and was sold to the custo for $1,500 cash. The customer was paid $1,500 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 on the account receivable within the discount period. 8. Took a physical count indicating that $21,100 of inventory was on hand at the end of the accounting period. Required information Income Statement REDD COMPANY Horizontal Statements Model - Year 2 Balance Sheet Assets - Liabilities Stockholders' Equity Accounts Merchandise Accounts Common Cash Receivable Inventory Payable Stock Earnings 16,900+ + 25,000 + 30,000+ 11,900 Event Statement of Cash Flows Retained Revenue Net Income Expenses - Bal 1a 1b. + + + 2 3 4a 4b 5b 6 7 8 0 $ 0 0 $ 0 $ $ $ 11,900 $ 014 $ 16.900 + $ 30.000 S $ Bal 25.000