EDIT: Earlier solutions: Check my Required information The following information
ID: 2340078 • Letter: E
Question
EDIT: Earlier solutions:
Check my 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 $8,700 2,700 8,200 3,200 Cash Inventory Common stock Retained earnings During Year 2, the company experienced the following events 1. Purchased inventory that cost $6,200 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $570 were paid in caslh 2. Returned $300 of the inventory it had purchased because the inventory was damaged in transit. 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 4. Sold inventory that had cost $6,700 for $9,700 on account, under terms 2/10, n/45 5. Received merchandise returned from a customer. The merchandise originally cost $570 and was sold to the customer for $870 cash. The customer was paid $870 cash for the returned merchandise 6. Delivered goods FOB destination in Event 4. Freight costs of $670 were paid in cash. 7. Collected the amount due on the account receivable within the discount period 8. Took a physical count indicating that $2,400 of inventory was on hand at the end of the accounting period c-1. Prepare a multistep income statement. c-2. Prepare a statement of changes in stockholders' equity c-3. Prepare a balance sheet. c-4. Prepare a statement of cash flowsExplanation / Answer
Solution:-
(c-1). Prepare a multistep income statement:-
= 9,700 - 870
= $8,830
= 6,700 - 870
= $5,830
= 8,830 - 5,830
= $3,000
= 570 + 670
= $1,240
= 3,000 - (1,240 + 184 + 107)
= $1,469
(c-2).prepare a statement of changes in stockholders' equity:-
= $8,288 + 0
= $8,288
= 3,288 + 1,469
= $4,757
= 8,288 + 4,757
= $13,045
(c-3).Prepare a balance sheet:-
= 13,045 - 2,400
= $10,645
Note:-
As per chegg rule i have time limit to complete answer .that's why iam not answered for the last two questions due to less time .if you need that questions also please upload it as a another question ,because i know the answer . please don't give thumb down.
THANK YOU.
Amount Net sales revenue= 9,700 - 870
= $8,830
Cost of goods sold= 6,700 - 870
= $5,830
Gross margin= 8,830 - 5,830
= $3,000
Operating expenses: Freight in= 570 + 670
= $1,240
Disscount allowed $184 Other income: Discount received $107 Net income= 3,000 - (1,240 + 184 + 107)
= $1,469
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