Required information (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 $16,800 7,000 2,600 15,000 11,400 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $11,800 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $860 were paid in cash. 2. Returned $750 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. Paid the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $9,500 for $15,500 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $1,500 and was sold to the customer for $2,700 cash. The customer was paid $2,700 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $750 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $4,700. 9. Recognized accrued interest income of $550. 10. Took a physical count indicating that $7,100 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.) Determine the current balance in the inventory account before calculating the amount of the inventory write down.) d. Prepare a multistep income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for year 2. (Statement of Cash Flows only, items to be deducted must be indicated with a minus amount.) REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Cash 0 Operating expenses 0 Nonoperating items $ 0 ! Required information REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 $ 0 0 Total stockholders' equity $ 0 REDD COMPANY Balance Sheet As of December 31, Year 2 REDD COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets $ 0 Liabilities Stockholders' Equity 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 ni IT-I-II-L!1!1!....det.I.L.IJ.--I ........ | ! Required information REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities 0 Ending cash balance $ 0 Required information (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 $16,800 7,000 2,600 15,000 11,400 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $11,800 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $860 were paid in cash. 2. Returned $750 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. Paid the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $9,500 for $15,500 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $1,500 and was sold to the customer for $2,700 cash. The customer was paid $2,700 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $750 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $4,700. 9. Recognized accrued interest income of $550. 10. Took a physical count indicating that $7,100 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.) Determine the current balance in the inventory account before calculating the amount of the inventory write down.) d. Prepare a multistep income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for year 2. (Statement of Cash Flows only, items to be deducted must be indicated with a minus amount.) REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Cash 0 Operating expenses 0 Nonoperating items $ 0 ! Required information REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 $ 0 0 Total stockholders' equity $ 0 REDD COMPANY Balance Sheet As of December 31, Year 2 REDD COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets $ 0 Liabilities Stockholders' Equity 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 ni IT-I-II-L!1!1!....det.I.L.IJ.--I ........ | ! Required information REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities 0 Ending cash balance $ 0