Question

[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 $ 7,700 1,700 7,200 2,200 During 2018, the company experienced the following events: 1. Purchased inventory that cost $5,200 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $470 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 Redd Company within the cash discount period. 4. Sold inventory that had cost $5,700 for $8,700 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $470 and was sold to the customer for $770 cash. The customer was paid $770 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $570 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $1,400 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 flows. Complete this question by entering your answers in the tabs below. Req C1 Req C2 Req C3 Req C4 Prepare a multistep income statement. REDD COMPANY Income Statement For the Year Ended December 31, 2018 INet sales Cost of goods sold Gross margin Operating expenses Transportation-out 570 INet income Reg C1 Req C2 >

Answer 1

Requrement (1) Redd Company Income Statement For the Year Ended December 31, 2018 Net Sales $ 7,756.00 Cost of goods sold $ 5,475.00 Gross Margin $ 2,281.00 Operating Expenses $ 570.00 Transportation Out $ 1,711.00 Net Income Requirement (3) Redd Company Balance Sheet As of December 31, 2018 Assets Cash $9,781.00 Merchandise Inventory $1,400.00 Accounts Receivable $ Requirement (4) Redd Company Statement of Cash flows For the Year Ended December 31, 2018 Cash flow from operating activities Inflow from customers $ 7,756.00 Outflow for invetory $ (5,105.00) Outflow for expenses $ (570.00) $ 11,181.00 $ 70.00 Total Assets Liabilities Stockholder's Equity Common Stock Retained Earnings Net Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net change in cash Plus : Beginning cash Balance Ending Cash Balance $2,081.00 $ $ $2,081.00 $7,700.00 $9,781.00 $7,200.00 $3,911.00 Requirement (c) Redd Company Statement of changes in stockholders Equity Fort For the Year Ended December 31, 2018 Beginning Common Stock $ 7,200.00 Add : Common Stock Issued $ Ending Common Stock $ 7,200.00 Beginning Retained Earings $ 2,200.00 Add : Net Income $ 1,711.00 Ending Retained Earnings $ 3,911.00 Total Stockholders Equity $ 11,111.00 Total Stockholders Equity Total Liabities and Stockholders Equity $ 11,111.00 $ 11,181.00 Note : Please comment down for any further clarifications