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 $8,600 2,600 8,100 3,100 During Year 2, the compe experienced the following events: 1. Purchased inventory that cost $6,100 on account from Ross Company under terms 2/10, 1/30. The merchandise was delivered FOB shipping point. Freight costs of $560 were paid in cash. 2. Returned $350 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 $6,600 for $9,600 on account, under terms 2/10,n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $560 and was sold to the customer for $860 cash. The customer was paid $860 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $660 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $2,300 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. -.2 Pronaro n halanre cheat S < Prey 4 of 5 Next >

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query ci Multistep Income Statement: Sales Revenue $ 9,600 Less: Sales Returna and allowance $ 860 Sales Discount $ 192 $ -1,052 Net Sales Revenue $ 8,548 Less: Cost of Goods Sold $ -6,495 Gross Margin $ 2,053 Less: Freight Expense $ -660 Net Income $ 1,393 $ 8,100 $ $ 8,100 c2 Statement of change in equity: Beginning Stock Add: Stock Issued Ending Common Stock Beginning Retained Earning Add: Net Income Ending Retained Earning Ending Stockholder's Equity $ 3,100 $ 1,393 $ 4,493 $ 12,593 $ 10,293 $ $ 2,300 $ 12,593 c3 Balance Sheet: Assets: Cash Accounts Receivable Inventory Total Assets Liabilities: Accounts Payable Total Liabilities Stockholder's Equity: Common Stock Retained earning Total Stockholder's Equity Total Liabilities and Equity $ $ - $ 8,100 $ 4,493 $ 12,593 $ 12,593 -660 c4 Statement of Cash Flow Cash flows from operating activities: Received from Accounts Receivable Payment of Inventory Payment of Freight outward Payment of Freight inward Payment of Returned goods Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Add: Beginning Balance Ending cash balance $ 9,408 $ -5,635 $ -560 $ $ -860 $ 1,693 $ $ $ 1,693 $ 8,600 $ 10,293