At the beginning of 2018, the Redd Company had the followingbalances in its accounts:

  

Cash	$	8,300
Inventory		2,300
Common stock		7,800
Retained earnings		2,800

  

During 2018, the company experienced the following events:

1. Purchased inventory that cost $5,800 on account from ReddCompany under terms 2/10, n/30. The merchandise was delivered FOBshipping point. Freight costs of $530 were paid in cash.

2. Returned $300 of the inventory that it had purchased because theinventory was damaged in transit. The seller agreed to pay thereturn freight cost.

3. Paid the amount due on its account payable to Redd Companywithin the cash discount period.

4. Sold inventory that had cost $6,300 for $9,300 on account, underterms 2/10, n/45.

5. Received merchandise returned from a customer. The merchandiseoriginally cost $530 and was sold to the customer for $830 cash.The customer was paid $830 cash for the returned merchandise.

6. Delivered goods FOB destination in Event 4. Freight costs of$630 were paid in cash.

7. Collected the amount due on the account receivable within thediscount period.

8. Took a physical count indicating that $2,000 of inventory was onhand at the end of the accounting period.

c-1. Prepare a multistep income statement.

	REDD COMPANY Income Statement For the Year Ended December 31,2018 Net Sales Cost of Goods Sold Gross Margin Operating expenses Transportation-out Net Income

c-2. Prepare a statement of changes instockholders’ equity.

	REDD COMPANY Statement of Changes in Stockholders’Equity For the Year Ended December 31,2018 Beginning common stock Plus: Stock Issued Ending common stock Beginning retained earnings Plus: Net Income Ending retained earnings Total stockholders’equity

c-3. Prepare a balance sheet.

	REDD COMPANY Balance Sheet As of December 31, 2018 Assets Cash Merch. Inventory Total assets Liabilities Stockholders’ Equity Common Stock Retained Earnings Total stockholders’ equity Total liabilities andstockholders’ equity

Prepare a statement of cash flows. (Enter cash outflows asnegative amounts.)

	REDD COMPANY Statement of Cash Flows For the Year Ended December 31,2018 Cash flows from operatingactivities Inflow from customers Outflow for expenses Outflow for inventory Net cash flow from operatingactivities Cash flows from investingactivities Cash flows from financingactivities Net change in cash Plus: Beginning cash balance Ending cash balance