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. Transportation costs of $480 were paid in cash 2. Returned $350 of the inventory it had purchased because the inventory was damaged in transit. The seller agreed to pay the return transportation 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. Transportation 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 Required information Balance Sheet REDD COMPANY Horizontal Statements Model Year 2 Income Statement Event Assets -Liabilities Stockholders' Equity Accounts Merchandise Accounts Common Retained Revenue Expenses Net Income Statement of Cash Flows Cash Receivable Inventory Payable Stock Earnings Balance 7,800+ + 1,800- + 7,300+ 2,300 la + + 1b. + + 2. 3 48 4b. 5a 56 6 7 B Balance + .