Please finish parts A-D.
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B.)
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D.)
0 Required information The following information applies to the questions displayed below.] The trial balance for Terry's Auto Shop as of January 1, Year 2, follows: Account Titles Cash Inventory Common Stock Retained Earnings Total Debit Credit $14,510 3,000 $ 7,410 10,100 $17,510 $17,510 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,100. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash. 3. Returned $475 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received an $215 allowance, 5. Sold merchandise that cost $2,650 for $13,700 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $135 cash. 7. Paid $2,890 on the merchandise purchased in Event 1. 8. Paid $8,500 cash for operating expenses, Required a. Record the events in general journal format. (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required information 1 01 4,100 Merchandise inventory Accounts payable 4,100 2 02 235 Accounts receivable Cash 235 3 03 475 Accounts payable Merchandise inventory 475 4 04 215 Accounts payable Merchandise inventory 215 5 5a 13,700 Cash Sales revenue 13,700 6 5b 2,650 Cost of goods sold Merchandise inventory 2,650 7 06 135 Transportation-out Cash 135 8 07 2,890 Accounts payable Cash 2,890 b. Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts. Cash Beg Bal 5a Answer is not complete. Accounts Payable Beg Bal 3 475 4, 1001 4 215 7 2.890 13.700 2 235 135 2,890 16 OOOO SOOS 7 8,500 8 End Bal 1,940 End Bal 520 Merchandise Inventory Common Stock Beg Bal 1 Beg Bal 4,100 4753 2154 2,650 5b End Bal 760 End Bal Retained Earnings Sales Revenue Beg Bal Beg Bal DA A Nav Required information End Bal 760 End Bal Retained Earnings Sales Revenue Beg Bal Beg Bal 13,700 5a. End Bal End Bal 13,700 Cost of Goods Sold Transportation-out Beg Bal 5b. Beg Bal 2,650 6 135 End Bal 2,650 End Bal 135 Operating Expenses Beg Bal 8 o 8,500 End Bal 8,500 c. Prepare a multistep income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made.) Complete this question by entering your answers in the tabs below. Income Statement Balance Sheet Statement of Cash Flows Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Net sales 0 S 0 d. Why does a difference exists between net income and net cash flow from operating activities. Multiple Choice The difference between not income and net cash flow from operating activities exists because operating expenses are not required be to accounted for when determining net income The difference between net income and net cash flow from operating activities exists because the shop is not selling all the inventory that it purchased during the period The difference between net income and net cash flow from operating activities exists because of maintaining the inventory records using the perpetual inventory system
