Required information [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 $6,040 Inventory 3,010 Common Stock 7,320 Retained Earnings 1,730 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 1 were purchased FOB shipping point with transportation cost of $220 cash. 3. Returned $460 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $225 allowance 5. Sold merchandise that cost $2,650 for $4,880 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $145 cash 7. Paid $2.820 on the merchandise purchased in Event 1 b. Prepare an income statement and a statement of cash flows for Year 2. (Assume that closing entries have been made.) Complete this question by entering your answers in the tabs below. Terry Inc Stmt Terry Stmt CF Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Operating expenses Terry Stmt CF >