Problem 4-26A Comprehensive cycle problem: Perpetual system LO 4-2, 4-3, The following information applies to the questions displayed below.] At the beginning of 2016, the Redd Company had the following balances in its accounts: $15,300 5,500 2,300 12,000 11,100 Cash Inventory Land Common stock Retained earnings During 2016, the company experienced the following events: 1. Purchased inventory that cost $11,500 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $830 were pald in cash. 2. Returned $600 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 $8,000 for $14,000 on account, under terms 2/10, n/45 5. Recelved merchandise returned from a customer. The merchandise originally cost $1,350 and was sold to the customer for $2,400 cash. The customer was paid $2,400 cash for the returned merchandise. 6. Dellivered goods FOB destination in Event 4. Freight costs of $720 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $4,100. 9. Recognized accrued interest income of $400. 10. Took a physical count indicating that $6,800 of inventory was on hand at the end of the accounting period Problem 4-26A Comprehensive cycle problem: Perpetual system LO 4-2, 4-3, The following information applies to the questions displayed below.] At the beginning of 2016, the Redd Company had the following balances in its accounts: $15,300 5,500 2,300 12,000 11,100 Cash Inventory Land Common stock Retained earnings During 2016, the company experienced the following events: 1. Purchased inventory that cost $11,500 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $830 were pald in cash. 2. Returned $600 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 $8,000 for $14,000 on account, under terms 2/10, n/45 5. Recelved merchandise returned from a customer. The merchandise originally cost $1,350 and was sold to the customer for $2,400 cash. The customer was paid $2,400 cash for the returned merchandise. 6. Dellivered goods FOB destination in Event 4. Freight costs of $720 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $4,100. 9. Recognized accrued interest income of $400. 10. Took a physical count indicating that $6,800 of inventory was on hand at the end of the accounting period
