Required information Exercise 4-12A (Algo) Effect of purchase returns and allowances and freight costs on the journal, ledger, and financial statements: Perpetual system LO 4-2, 4-4, 4-6 [The following information applies to the questions displayed below.] The trial balance for Terry's Auto Shop as of January 1, Year 2, follows: Inventory Account Titles Cash Common Stock Retained Earnings Total Debit $ 14,770 3,030 Credit $ 7,410 10,390 $ 17,800 $ 17,800 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,240. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $270 cash. 3. Returned $440 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $255 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 $175 cash. 7. Paid $2,940 on the merchandise purchased in Event 1. 8. Paid $8,770 cash for operating expenses. Exercise 4-12A (Algo) Part b b. Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts. Cash Beg. Bal Accounts Payable Beg. Bal Retained Earnings Sales Revenue Beg. Bal Beg. Bal End. Bal End. Bal Cost of Goods Sold Transportation-out End. Bal End. Bal Beg. Bal Beg. Bal Inventory Common Stock Beg. Bal Beg. Bal End. Bal End. Bal End. Bal End. Bal Operating Expenses Beg. Bal End. Bal