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At the beginning of Year 2, the Redd Company had the following balances in its accounts: Canh Inventory Land Common stock Retained onrninga $ 6,900 15,000 7,000 15,000 13,900 During Year 2, the company experienced the following events: 1. Purchased Inventory that cost $5,200 on account from Ross Company under terms 110, n/30. The merchandise was delivered FOB shipping point. Freight costs of $190 were paid in cash. 2. Returned $400 of the inventory it had purchased from Ross Company because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Pald the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $6,800 for $12,100 on account, under terms 2/10, 1/45 5. Received merchandise returned from a customer. The merchandise originally cost $900 and was sold to the customer for $1,680 cash. The customer was paid $1,680 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $140 were paid in cash. 7. Collected the amount due on the account receivable within the discount period, 8. Sold the land for $8.500. 9. Recognized accrued interest income of $600, 10. Took a physical count indicating that $13,400 of inventory was on hand at the end of the accounting period. (Hint: Determine the current balance in the inventory account before calculating the amount of the inventory write down) Financial Statements Effect of Events on the Financial Statements for Year 2 Balance Sheet Event No. Event TYRF Statement of Cash Flows Assets = Liabilities + Income Statement Net Revenue - Expenses = Income NA NA NA Stk. Equity NA 1a. AS + NA NA 1b. AE +/- NA NA NA NA NA 2. 3a. Disc 3b. Pay 4a. Sale 4b. Cost 5a. Ret Rev 5b. Ret Cost 6. Frt. 7a. Disc 75. Coll. 8. Land 9. Int. 10. Adj

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