Problem 4-26A Comprehensive cycle problem: Perpetual system LO 4-2, 4-3, 4-4, 4-5, 4-6, 4-7 [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 Land Common stock Retained earnings $ 6,900 15,000 7.000 15,000 13,900 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 merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash. 2. Returned $400 of the inventory it had purchased from Ross Company because the inventory was damaged in transit The seller agreed to pay the return freight cost. 3. Pald the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10,n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $1,680 cash. The customer was paid $1680 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. Sold the land for $8,500. 9. Recognized accrued interest income of $600. 10. Took a physical count indicating that $13,400 of inventory was on hand at the end of the accounting period. (Hint: Determine the current balance in the Inventory account before calculating the amount of the inventory write down.) ! Required information requirea vor a transaction/event, select "No journal entry required in the first account nieia.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 15 Record entry inventory purchased on account from Ross company terms 1/10, n/30. Note: Enter debits before credits. Event General Journal Debit Credit es 1a Record entry Clear entry View general Journal Required information required for a transaction/event, select "TO Journal entry required in the first account Tiera.) View transaction list Journal entry worksheet 2 1 3 4 5 6 7 8 8 15 > Record entry freight cost paid in cash. Note: Enter debits before credits. Event General Journal Debit Credit 1b Record entry Clear entry View general journal Required information requirea for a transaction/event, select "No journal entry requirea" in the first account Tiera.) View transaction list Journal entry worksheet Record entry for cost of goods sold. Note: Enter debits before credits. General Journal Debit Credit es Event 45 Record entry Clear entry View general journal Required information requirea for a transaction/event, select "No journal entry required in the tirst account treia.) View transaction list Journal entry worksheet Record entry for return of merchandise sold. Note: Enter debits before credits Event General Journal Debit Credit 5a Record entry Clear entry View general journal Required information requirea for a transaction/event, select "No journai entry required in the tirst account neia.) View transaction list Journal entry worksheet 1 4 9 5 6 7 8 ... 15 Record entry for cost of goods sold return. Note: Enter debits before credits. Event General Journal Debit Credit 5b Record entry Clear entry View general journal Required information requirea for a transaction/event, select "No journai entry required in the first account treia.) View transaction list Journal entry worksheet 1 5 6 78 9 10 15 > Record cash paid for freight charges for delivered goods. Note: Enter debits before credits General Journal Debit Credit Event 06 Record entry Clear entry View general journal Required information required for a transaction/event, select "No journal entry required in the first account riera.) View transaction list Journal entry worksheet 1 .....6 7 8 9 10 11 Record entry for discount on Inventory sold. Note: Enter debits before credits. Event General Journal 7a Dobit Credit 5 Record entry Clear entry View general journal Required Information requirea vor a transaction/event, select "No journal entry required in the Trst account Tel.) f5 View transaction list Journal entry worksheet Record entry for collect the amount due on the account receivable within the discount period. Note: Enter debits before credits Event General Journal Debit Credit ces 7b Record entry Clear entry View general Journal Required information required for a transaction/event, select "No journal entry required in the Tirst account Tieto.) 2 of 5 View transaction list Journal entry worksheet
