Check 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 Common Stock Retained Earnings Beginning Balances $6,150 , 3,120 7,320 1,950 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,230. 2. The goods in Event 1 were purchased FOB shipping point with transportation cost of $245 cash. 3. Returned $500 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $250 allowance. 5. Sold merchandise that cost $2,630 for $4,810 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $185 cash. 7. Paid $2,870 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. une tabs below. Terry Inc Stmt Terry Stmt CF Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Operating expenses Wewe ni OF Prepare a statement of cash flows. (Cash outflows 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 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance