ework-Chapter 3 Required Information 1 of 3 Exercise 3-7 Effect of purchase returns and allowances and freight costs on the financial statements: Perpetual system LO 3-2 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 Beginning Balances Cash Inventory Common Stock Retained Earnings $16,000 8,800 28,800 4,000 The following events affected the company during the 2018 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 $2600 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company receiveda $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 cesh 7. Pald $8,000 on the merchandise purchased in Event 1 Exercise 3-7 Parta Required o. Organice approprete tesper.eccounts under an accounting esuation Resero he seaimmine bsances and the transaction care n 6 Exercise 3-7 Part a Required . Orpanize appropriste ledger accounts under an accounting equation. Record the beginning balances and the transaction data in Part 1 of 3 5.55 points the accounts. In the lest column of the table. provide appropriate account titles for the Retained Earnings amounts.(Enter any decreeses to eccount belences with a minus sign. Select "NA" If there ls no effect on the "Accounts Titles for Retained Baminge Effect of Events on the Financial Statements Liabilities Stockholders Equity Accounts CommonRetained Accounts Titles for Retained Hint Assets Events Cash Inventory NA Beg Ba Pint 50 Reterences 5b End Bal Prev 8:78 of 18 Next >