Complete the sheet based on the problem requirements listed below:

a) identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).

b) record each event in a horizontal financial statements model.

c) prepare a multistep income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows.

Given Data P04-25A: REDD COMPANY Beginning balances Year 2: Cash Inventory Common Stock Retained earnings $ $ A A A A 16,900 25,000 30,000 11,900 $ Year 2 Events: 1a. Inventory purchased on account 1b. Freight cost paid in cash 2. Inventory returned 3. Paid account payable less discount 4a. Inventory selling price 4b. Inventory cost 5a. Returned merchandise cost 5b. Returned merchandise selling price 6. Freight costs paid in cash 7. Collected receivable less discount 8 Ending inventory on hand per count $ $ $ $ A A A A A 15,200 200 800 ? 32,000 18,000 800 1,500 140 ? 21,100 $ PROBLEM 4-25A Redd Company Horizontal Statements Model Year 2 Balance Sheet Income Statement Statement Event Type Accts. Rec. Mdse. Inv. Accts. Pay -------- Comm + Stock Ret. Earn. Of Cash Flows Cash + + + + Rev. - Exp. = Net Inc. | + + + + - 1 1 + - + + + + + + + + + + = + Event No. Bal. 1a. 1b. 2 3.1 4a. 4b. 5a. 5b. 6 7 8 Bal. +++ ++ = + + + IL LII IN ILLILILLLILII II + - + + + + + + + II II II II II II II II II II II II | II + + + + + + + + + = + + + = + + + + + + + + + 1 - - + + + + 1 Requirement c: REDD COMPANY Financial Statements For the Year Ended December 31, Year 2 Income Statement Net Sales Cost of Goods Sold Gross Margin Operating Expenses Transportation-out Operating/Net Income Statement of Changes in Stockholders' Equity Beginning Common Stock Plus: Stock Issued Ending Common Stock Beginning Retained Earnings Plus: Net Income Ending Retained Earnings Total Stockholders' Equity Balance Sheet Assets Cash Merchandise Inventory Total Assets Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Statement of Cash Flows Cash Flows from Operating Activities: Inflow from Customers Outflow for Inventory Outflow for Expenses Net Cash Flow from Operating Activities Cash Flows from Investing Activities: Cash Flows from Financing Activities Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance Given Data P04-25A: REDD COMPANY Beginning balances Year 2: Cash Inventory Common Stock Retained earnings $ $ A A A A 16,900 25,000 30,000 11,900 $ Year 2 Events: 1a. Inventory purchased on account 1b. Freight cost paid in cash 2. Inventory returned 3. Paid account payable less discount 4a. Inventory selling price 4b. Inventory cost 5a. Returned merchandise cost 5b. Returned merchandise selling price 6. Freight costs paid in cash 7. Collected receivable less discount 8 Ending inventory on hand per count $ $ $ $ A A A A A 15,200 200 800 ? 32,000 18,000 800 1,500 140 ? 21,100 $ PROBLEM 4-25A Redd Company Horizontal Statements Model Year 2 Balance Sheet Income Statement Statement Event Type Accts. Rec. Mdse. Inv. Accts. Pay -------- Comm + Stock Ret. Earn. Of Cash Flows Cash + + + + Rev. - Exp. = Net Inc. | + + + + - 1 1 + - + + + + + + + + + + = + Event No. Bal. 1a. 1b. 2 3.1 4a. 4b. 5a. 5b. 6 7 8 Bal. +++ ++ = + + + IL LII IN ILLILILLLILII II + - + + + + + + + II II II II II II II II II II II II | II + + + + + + + + + = + + + = + + + + + + + + + 1 - - + + + + 1 Requirement c: REDD COMPANY Financial Statements For the Year Ended December 31, Year 2 Income Statement Net Sales Cost of Goods Sold Gross Margin Operating Expenses Transportation-out Operating/Net Income Statement of Changes in Stockholders' Equity Beginning Common Stock Plus: Stock Issued Ending Common Stock Beginning Retained Earnings Plus: Net Income Ending Retained Earnings Total Stockholders' Equity Balance Sheet Assets Cash Merchandise Inventory Total Assets Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Statement of Cash Flows Cash Flows from Operating Activities: Inflow from Customers Outflow for Inventory Outflow for Expenses Net Cash Flow from Operating Activities Cash Flows from Investing Activities: Cash Flows from Financing Activities Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance