At the beginning of Year 2, the Redd Company had the following balances in its accounts: $8,800 2,800 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 that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. Cash Inventory Common stock Retained earnings 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 period. 8. Took a physical count indicating that $2,500 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 flows.
At the beginning of Year 2, the Redd Company had the following balances in its accounts: $8,800 2,800 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 that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. Cash Inventory Common stock Retained earnings 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 period. 8. Took a physical count indicating that $2,500 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 flows.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:M Question 5 - Chapter 3 Quiz - Co X
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At the beginning of Year 2, the Redd Company had the following balances in its accounts:
$8,800
2,800
8,300
3,300
Cash
Inventory
Common stock
Retained earnings
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 that 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.
c-1. Prepare a multistep income statement.
c-2. Prepare a statement of changes in stockholders' equity.
Saved
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.
c-3. Prepare a balance sheet.
c-4. Prepare a statement of cash flows.
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