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: The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,290. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $205 cash. 3. Returned $455 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $205 allowance. 5. Sold merchandise that cost $2,690 for $13,500 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $145 cash. 7. Paid $2,900 on the merchandise purchased in Event 1. 8. Paid $8,580 cash for operating expenses. Exercise 4-12A (Algo) Part c 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. Prepare a balance sheet