Required information [The following information applies to the questions display

Question

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 2,808 8,300 3,380 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 paid in cash. 7. Collected the amount due on the account receivable within the discount perlod. 8. Took a physical count indicating that $2.500 of inventory was on hand at the end of the accounting period.

Explanation / Answer

REDDO COMPANY HORIZONTAL STATEMENTS MODEL - YEAR 2 Event Balance Sheet Income Statement Statement of cash flows ASSETS = Liabilities Stockholders Equity Revenue - Expense = Net Income Cash + Accounts Receivable + Merchandise Inventory Accounts Payable Common Stock Retained Earnings Bal $8,800 $2,800 $8,300 $3,300 NA 1a 6300 6300 1b -580 580 OA 2 -400 -400 NA 3 -5782 -5900 118 -5782 OA 4a -6800 6800 NA 4b 9800 9800 NA 5a 580 -580 NA 5b -880 -880 -880 OA 6 -680 680 -680 OA 7 9604 -9800 196 9604 OA 8 20 -20 NA Bal $10,482 $0 $2,500 $0 $8,300 $3,300 $9,038 $7,656 $0 $2,262

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

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