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 beiow] The trial balance for Terry's Auto Shop as of January 1, Year 2, follows: The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,260. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $200 cash. 3. Returned $490 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $210 allowance. 5. Sold merchandlse that cost $2,590 for $13,800 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $190 cash. 7. Paid $2,890 on the merchandise purchased in Event 1. 8. Paid $8,910 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. Retained Earnings Operating Expenses Sales Revenue Transportation-out