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During Year 2, the company experienced the following events: 1. Purchased inventory that cost $15,200 on account from Ross Company under terms 1/10,n/30. The merchandise was delivered FOB shipping point. Transportation costs of $200 were paid in cash. 2. Returned $800 of the inventory it had purchased because the inventory was damaged in transit. The seller agreed to pay the return transportation 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 customer for $1,500 cash. The customer was paid $1,500 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Transportation 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. REDD COMPANY Beginning balances Year 2: Cash Inventory Common Stock Retained earnings $$$$16.90025.00030.00011.900 Year 2 Events: 1a. Inventory purchased on account 1b. Freight cost paid in cash 2. Inventory returned 3. Paid account payable 4a. Inventory selling price 4b. Inventory cost 4b. Inventory cost 5b.Returnedmerchandisesellingprice6.Freightcostspaidincash$$1.500140 6. Freight costs paid in cash 8 Ending inventory on hand per count ? 21.100 For the Year Ended Decenber 31, Year 2 Incolta strttatent Net Salez Cost of Goods Sold Grosz Marqin Operstinq Expenses Transportation-out OperstingiNet Income Beqinninq Common Stock Plus: Stock lssued Endinq Common Stock Beqinning Retained Earninqz Pluz: Net lncome Endinq Retained Earningz Total Stockholderz' Equity Balances stat AEzetz Cash Merchandise Inventory Total Aszets Lisbilitiez Stockholders' Equity Common Stock Retained Earningz Total Stockholder z Equity Total Liabilities and Stockholders' Equity Sittertat of Cith Flore Cosh Flows from Operating Activities: Inflow from Cujtomers Dutflow for lnventory Dutflow for Expenses Net Cosh Flow from Operating Activities Cash Flows from Investing Activities: Cash Flowz from Financinq Activities Net Chanqe in Cash Pluz: Beqinning Cosh Balance Ending Cash Balance During Year 2, the company experienced the following events: 1. Purchased inventory that cost $15,200 on account from Ross Company under terms 1/10,n/30. The merchandise was delivered FOB shipping point. Transportation costs of $200 were paid in cash. 2. Returned $800 of the inventory it had purchased because the inventory was damaged in transit. The seller agreed to pay the return transportation 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 customer for $1,500 cash. The customer was paid $1,500 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Transportation 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. REDD COMPANY Beginning balances Year 2: Cash Inventory Common Stock Retained earnings $$$$16.90025.00030.00011.900 Year 2 Events: 1a. Inventory purchased on account 1b. Freight cost paid in cash 2. Inventory returned 3. Paid account payable 4a. Inventory selling price 4b. Inventory cost 4b. Inventory cost 5b.Returnedmerchandisesellingprice6.Freightcostspaidincash$$1.500140 6. Freight costs paid in cash 8 Ending inventory on hand per count ? 21.100 For the Year Ended Decenber 31, Year 2 Incolta strttatent Net Salez Cost of Goods Sold Grosz Marqin Operstinq Expenses Transportation-out OperstingiNet Income Beqinninq Common Stock Plus: Stock lssued Endinq Common Stock Beqinning Retained Earninqz Pluz: Net lncome Endinq Retained Earningz Total Stockholderz' Equity Balances stat AEzetz Cash Merchandise Inventory Total Aszets Lisbilitiez Stockholders' Equity Common Stock Retained Earningz Total Stockholder z Equity Total Liabilities and Stockholders' Equity Sittertat of Cith Flore Cosh Flows from Operating Activities: Inflow from Cujtomers Dutflow for lnventory Dutflow for Expenses Net Cosh Flow from Operating Activities Cash Flows from Investing Activities: Cash Flowz from Financinq Activities Net Chanqe in Cash Pluz: Beqinning Cosh Balance Ending Cash Balance
