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Question

Connected U https:/ww.forentD AppleDDisney ESPN D YahoolCloud Facebook Ti The following information applies to the questions displayed below) At the beginning of 2018, the Redd Company had the following balances in its accounts Cash Inventory Common stock Retained earnings 57,880 1,800 7,300 2,380 During 2018, the company experienced the following events 1. Purchased inventory that delivered FOB shipping point. Freight costs of $48? were paid in cash. 2 Returned $350 of the inventory that it had purchased because cost $5.300 on account frgom Redd Company under terms 2/10, n/30. The merchandise was 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 Redd Company within the cash discount period 4. Sold inventory that had cost $5.800 for $8,800 on account, under terms 2/10, n/45 5. Received merchandise returned from a customer. The merchandis e originally cost $480 and was sold to the customer for $780 cash. The customer was paid $780 cesh for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $580 were paid in cosh 7. Collected the amount due on the account receivable within the discount period 8. Took a physical count indicating that $1.500 of inventory was on hand at the end of the accounting period Pre 3 Next> to search F3 F5 F6 F7 F8 F9 F10 F11 4 5 6 7 8

Explanation / Answer

REDD COMPANY Hoizontal Statements Model - 2018 Event Assets = Liabilities + Stockholders' Equity Income Statement Statement of Cash Flows Cash + Accounts Receivable + Merchandise Inventory = Accounts Payable + Common Stock + Retained Earnings Revenue - Expenses = Net Income Beg. Bal.         7,800.00 + +                  1,800.00 = +          7,300.00 +         2,300.00 - =                     -   1a. + +                  5,300.00 =           5,300.00 + + - =                     -   NA 1b.          (480.00) + +                     480.00 = + + - =                     -            (480.00) Operating 2. + +                   (350.00) =             (350.00) + + - =                     -   NA 3.       (4,851.00) + + =         (4,950.00) + +               99.00              99.00 - =              99.00       (4,851.00) Operating 4a. +        8,800.00 + = + +         8,800.00        8,800.00 - =        8,800.00 NA 4b. + +               (5,800.00) = + +      (5,800.00) -        5,800.00 =      (5,800.00) NA 5a.          (780.00) + + = + +          (780.00) -            780.00 =          (780.00)          (780.00) Operating 5b. + +                     480.00 = + +            480.00            480.00 - =            480.00 NA 6.          (580.00) + + = + +          (580.00) -            580.00 =          (580.00)          (580.00) Operating 7.         8,624.00 +      (8,800.00) + = + +          (176.00) -            176.00 =          (176.00)         8,624.00 Operating 8. + +                   (410.00) = + +          (410.00) -            410.00 =          (410.00) NA + + = + + - =                     -   Total         9,733.00 +                     -   +                  1,500.00 =                        -   +          7,300.00 +         3,933.00        9,379.00 -        7,746.00 =        1,633.00         1,933.00

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