Need help answering the wrong answers they’re the ones with an x. It’s the third

Question

Need help answering the wrong answers they’re the ones with an x. It’s the third picture Need help answering the wrong answers they’re the ones with an x. It’s the third picture 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 Inventory Common stock Retained earnings $8,800 2,880 8,300 3,300 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $6.300 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $580 were paid in cash. 2. Returned $400 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 $6,800 for $9.800 on account, under terms 2/10, n/45 5. Received merchandise returned from a customer. The merchandise originally cost $580 and was sold to the customer for $880 cash. The customer was paid $880 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $680 were pald in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $2.500 of inventory was on hand at the end of the accounting period. search

Explanation / Answer

Took a Physical countindication that $2,500 of inventory was on hand at the end of the accounting period?

Answer: As at the end of the period inventory on hand is 2,500 and inventory in books is 2,480 only, we have to increase the inventory by passing a journal entry by debiting inventory and credit to retianed earnings for the difference of 20, as it is not an income and expense it will not be taken to income statement.

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.