a Chapter 04 Peactice Probx /hm.tpx Probiem 426A Comprehensive cycle problem Perpetual system LO 4-2,43,44 The ellowing intormetion applies to he questions displeyed belowJ ia the beginning of 2016 the Redd Company had the following belarices in its accoures Common stock Retained earnings 2.900 18.000 1700 During 2016, the company experienced the foilowing events trom Ross Company under terms 2/10, n/30. The menchandise was delvered FOB shipping point Freight costs of $890 were paid in cash h 2 Retirmed seco orte ienon 4 Soid inventory that had cost 38 500 for $16500 on accourt, becane the lvemory wes cemiged in tensit he amount due on ts accout payable to Ross Company within the cash discount period The "erchandise orignally cost St S50 and was soid to under terms 210, n45 etrnedon, a custoner the customer for $2,000 cash. The custiomer was paid $2.000 cash for the returmed merchandise 6. Delivered goods FOB destination in Event 4 Freight costs of $780 were paid in cash 7 Colected the amount due on the account receivabie 8. Sold the land for $5,300 9 Recognized accrued interest income of $700 wthin the discount perod 10 Took a physical count indicating that $3,500 of invermory wes on hand at the end of the accounting period References Protiem 4 26A Comprehensive cycle problem Perpetual system LO 4-2, 43 44 Section Break 09