At the beginning of Year 2, the Redd Company had the followingbalances in its accounts:
|
| Cash | $ | 8,000 | |
| Inventory | | 2,000 | |
| Common stock | | 7,500 | |
| Retained earnings | | 2,500 | |
|
During Year 2, the company experienced the following events:
- Purchased inventory that cost $5,500 on account from RossCompany under terms 2/10, n/30. The merchandise was delivered FOBshipping point. Freight costs of $500 were paid in cash.
- Returned $350 of the inventory it had purchased because theinventory was damaged in transit. The seller agreed to pay thereturn freight cost.
- Paid the amount due on its account payable to Ross Companywithin the cash discount period.
- Sold inventory that had cost $6,000 for $9,000 on account,under terms 2/10, n/45.
- Received merchandise returned from a customer. The merchandiseoriginally cost $500 and was sold to the customer for $800 cash.The customer was paid $800 cash for the returned merchandise.
- Delivered goods FOB destination in Event 4. Freight costs of$600 were paid in cash.
- Collected the amount due on the account receivable within thediscount period.
- Took a physical count indicating that $1,700 of inventory wason hand at the end of the accounting period.
c-1. Prepare a multistep incomestatement.
c-2. Prepare a statement of changes instockholders’ equity.
c-3. Prepare a balance sheet.
c-4. Prepare a statement of cash flows.
put each of these in Schedule.
