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 Common stock Retained earnings $7,800 1,800 7,300 2,300 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $5,300 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $480 were paid in cash. 2. Returned $350 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 $5,800 for $8,800 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $480 and was sold to the customer for $780 cash. The customer was paid $780 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $580 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $1,500 of inventory was on hand at the end of the accounting period. 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 Req C2 Req C3 Req C4 Prepare a multistep income statement. REDD COMPANY Income Statement For the Year Ended December 31, Year 2 Net sales Cost of goods sold Gross margin Operating expenses Transportation-out Net income Reg C1 Rea C2 > Complete this question by entering your answers in the tabs below. Req C1 Req C2 Req C3 Req C4 Prepare a statement of changes in stockholders' equity. REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock Ending common stock Beginning retained earnings 0 Ending retained earnings 0 Total stockholders' equity $ 0 Req C1 Req C3 > Req C1 Req C2 Req C3 Req 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 < Rea C2 EA EA $ $ 0 0 0 Rea C4 Req C1 Req C2 Req C3 Req C4 Prepare a statement of cash flows. (Cash outflows should be indicated with a minus sign.) 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 $ 0 0 $ 0 < Req C3 Req C4