6 art 2 of 3 5 pints eBook Hi Print References Required information [The following information applies to the questions displayed below.] The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Account Titles Cash Inventory Connon Stock Retained Earnings Beginning Balances $ 16,000 8,000 20,000 4,000 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $15,000. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $800 cash. 3. Returned $2,600 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $1,100 allowance. 5. Sold merchandise that cost $15,000 for $31,000 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $500 cash. 7. Paid $8,000 on the merchandise purchased in Event 1. 3 4. Agreed to keep other damaged merchandise for which the company received a $1,100 allowance. 5. Sold merchandise that cost $15,000 for $31,000 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $500 cash. 7. Paid $8,000 on the merchandise purchased in Event 1. b. Prepare an income statement and a statement of cash flows for Year 2. (Assume that closing entries have been made.) Complete this question by entering your answers in the tabs below. Income Statement Statement of Cash Flows Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Cash $ ces Inventory 16,000 8,000 8,000 Operating expenses $ 8,000 Sauna Statamani Statement of Cash Flows > Part 2 of 3 2.5 points eBook Hint Print b. Prepare an income statement and a sta Complete this question by entering your answers in the tabs below. Statemed of Income Statement Cash Flows Prepare a statement of cash flows. Note: Amounts to be deducted should be indicated with a minus sign.. TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities: References Net cash flow from operating activities Cash flows from investing activities. Cash flows from financing activities: Net change in cash Ending cash balance $ 0 0 0