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 $ 6,900 15,000 Inventory Land 7,000 Common stock 15,000 Retained earnings 13,900 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $5,400 on account from Ross Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash.(LO 4-4) 2. Returned $400 of the inventory it had purchased from Ross Company because the Inventory was damaged in transit. (LO 4-2) 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. (LO 4-3) 4. Sold inventory that had cost $6,800 for $12,000 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $2,000 cash. The customer was given credit for the returned merchandise. (LO4-7, Event 2a and 2b) 6. Delivered goods FOB destination in Event 4. Freight costs of $140 were paid in cash. (LO 4-4, Event 8) 7. Collected the amount due on the account receivable within the discount period. (L04-7, Event 3) 8. Sold the land for $8,500. 9. Recognized accrued interest income of $600. 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 sign.) REDD COMPANY Income Statement For the Year Ended December 31, Year 2 0 Operating expenses Nonoperating items $ 0 0 REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Total stockholders' equity Assets REDD COMPANY Balance Sheet As of December 31, Year 2 Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Ending cash balance 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 $ 6,900 15,000 Inventory Land 7,000 Common stock 15,000 Retained earnings 13,900 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $5,400 on account from Ross Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash.(LO 4-4) 2. Returned $400 of the inventory it had purchased from Ross Company because the Inventory was damaged in transit. (LO 4-2) 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. (LO 4-3) 4. Sold inventory that had cost $6,800 for $12,000 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $2,000 cash. The customer was given credit for the returned merchandise. (LO4-7, Event 2a and 2b) 6. Delivered goods FOB destination in Event 4. Freight costs of $140 were paid in cash. (LO 4-4, Event 8) 7. Collected the amount due on the account receivable within the discount period. (L04-7, Event 3) 8. Sold the land for $8,500. 9. Recognized accrued interest income of $600. 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 sign.) REDD COMPANY Income Statement For the Year Ended December 31, Year 2 0 Operating expenses Nonoperating items $ 0 0 REDD COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Total stockholders' equity Assets REDD COMPANY Balance Sheet As of December 31, Year 2 Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity REDD COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Ending cash balance