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Required information The following information applies to the questions displayed below. The beginning account balances for Terry's Auto Shop as of January 1, 2018, follows: Account Titles Cash Inventory Common Stock Retained Earnings Beginning Balances $6,030 3,130 7,310 1,850 The following events affected the company during the 2018 accounting period: 1. Purchased merchandise on account that cost $4,180. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $255 cash. 3. Returned $445 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $245 allowance. 5. Sold merchandise that cost $2,670 for $4,890 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $150 cash. 7. Paid $2,860 on the merchandise purchased in Event 1 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Terry Inc Stmti Terry Stmt CF Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, 2018 Net sales Cost of goods sold Gross margin Operating expenses $4,890 2,670 2,220 150 $ 2,070 Transportation-out Net income Prepare a statement of cash flows. (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, 2018 Cash flow from operating activities Cash inflow from customers Cash outflow for expenses Cash outflow for inventory $ 4,890 (150) (3,385) Net cash flow from operating activties Cash flows from investing activities Cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance $1,355 1,355 6,170 $ 7,525