Required information Exercise 4-12A (Algo) Effect of purchase returns and allowances and transportation costs on the financial statements: Perpetual system LO 4-2, 4-4, 4-6 [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 Beginning Balances Cash Inventory Common Stock: Retained Earnings $ 6,030 3,040 7,480 1,590 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,210. 2. The goods in Event 1 were purchased FOB shipping point with transportation cost of $230 cash. 3. Returned $475 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $280 allowance. 5. Sold merchandise that cost $2,740 for $4,830 cash. 6. Delivered therchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $160 cash. 7. Paid $2.820 on the merchandise purchased in Event 1. Required: a. Organize appropriate accounts under an accounting equation. Record the beginning balances and the transaction data in the accounts. In the last column of the table, provide appropriate input neededs for the Retained Earnings amounts. Note: Enter any decreases to account balances with a minus sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input- leave cells blank if there is no corresponding Retained Earnings input needed. TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets Liabilities + Events Cash + Inventory Accounts Payable Common Stock Stockholders' Equity Retained Earnings Accounts Titles for Retained Earnings Beginning Balance 1. Purchased Inventory 2. Transport 3 Returned Inventory 4. Allowance 5a. Salos 5b. Cost 6. Transportation. 7 Paid Accounts Payable Ending Balance + + + + 0 0 0 lls in the Retained Earnings input needed. Statements Stockholders' Equity Common Retained Stock Earnings Accounts Titles for Retained Earnings 0 0 Cost of sales Dividend Sales Transportation out expenses 345 Next > 8 +F.S. PPT FID D F11 No FIR 39F