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: Inventory Common stock Retained earnings $8,400 2.000 8,000 2.400 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $5,600 on account from Ross Company under terms 2/10, 1/30. The merchandise was delivered FOB shipping point. Freight costs of $500 were paid in cash. 2. Returned $400 of the inventory 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 $6,000 for $9,000 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $520 and was sold to the customer for $840 cash. The customer was paid $840 cash for the returned merchandise 6. Delivered goods FOB destination in Event 4. Freight costs of $600 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $1.800 of inventory was on hand at the end of the accounting period. b. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) REDD COMPANY Horizontal Statements Model - Year 2 Balance Sheet Income Statement - Liabilities - Stockholders' Equity Net Merchandise Accounts Common Retained hed Revenue - Expenses = Income Inventory Payable Stock Earnings 2.000 8,000 + 2.400 Assets Event Statement of Cash Flows Accounts Receivable Bal. 8.400 Bal $ 8.400 $ 0 $ 2.000 $ 0 . $ 2,400 $ 0 - $ 0 - $ 0 $ 0 C-1. Prepare a multistep income statement. C-2. Prepare a statement of changes in stockholders' equity. c-3. Prepare a balance sheet. C-4. Prepare a statement of cash flows. Complete this question by entering your answers in the tabs below. Req c1 Reg C2 Req c3 Req C4 a multistep income statement. DET 81 REDD COMPANY Income Statement Ended December 31, Year 2 m = 1 Regci Req c2 > C-3. Prepare a balance sheet. c-4. Prepare a statement of cash flows. Complete this question by entering your answers in the tabs below. Req c1 Reg C2 Reg C3 Reg C4 Prepare a balance sheet. REDD COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity c-3. Prepare a balance sheet. C-4. Prepare a statement of cash flows. Complete this question by entering your answers in the tabs below. complete the Reg C1 Reg C2 ka Rea C3 Reg C3 Reg C4 Prepare a statement of cash flows. (Enter cash outflows as negative amounts.) REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance