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 8100
Inventory 2100
Common stock 7600
Retained earnings 2600
During 2018, the company experienced the following events:
1. Purchased Inventory that cost $5,600 on account from Redd Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point Freight costs of $510 were paid in cash
2. Returned $300 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 $6,100 for $9.100 on account, under terms 2/10, n/45
5. Received merchandise returned from a customer. The merchandise originally cost $510 and was sold to the customer for $810 cash. The customer was paid $810 cash for the returned merchandise
6. Delivered goods FOB destination in Event 4. Freight costs of $610 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $1,800 of inventory was on hand at the end of the accounting period.
Required:
1. Prepare a multistep income statement.
2. Prepare a statement of changes in stockholders’ equity.
3. Prepare a balance sheet.
4. Prepare a statement of cash flows.