Required information 34 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 Debit Credit $14,560 3,462 $ 7,470 10,150 $17,620 $17,620 Total The following events affected the company during the Year 2 accounting, period: 1. Purchased merchandise on account that cost $4,170. 2. The goods in Event were purchased FOB shipping point with freight cost of $255 cash. 3. Returned $480 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received an $280 allowance 5. Sold merchandise that cost $2,730 for $13,100 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $170 cash 7. Paid $2,830 on the merchandise purchased in Event 1, 8. Paid $8,540 cash for operating expenses 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 10