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. 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 needed for the Retained Earnings amounts. (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.) 2 TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets - Liabilities Stockholders' Equity Inventory Accounts Common Retained Payable Stock Earnings Cash Accounts Titles for Retained Earnings Events Beg Bal 1. Pur Inv 2. Transport 3. Ret. In 4. Allow 5a Sales 5b Cost 6 Tran 7 Paid AP End Bal ++