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, follows: Beginning Balances $6,100 3,030 7,430 1,700 Account Titles Cash Inventory Common Stock Retained Earnings The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,230. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $260 cash. 3. Returned $470 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $200 allowance. 5. Sold merchandise that cost $2,580 for $4,940 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $120 cash. 7. Paid $2,800 on the merchandise purchased in Event 1. Required a. Organize appropriate ledger 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 neededs 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.) TERRY'S AUTO SHOP Effect of Events on the Financial Statements Liabilities+ Stockholders' Equity Assets Accounts Titles for Retained Accounts Common Stock Retained Events Cash Inventory Payable Earnings Earnings Beg. Bal. + + 1. + = 2 + 3. + 4. + 5a 4+ 5b + 6 + - 7 + - 0 0E 0+ End Bal 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 0 Operating expenses 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 Stmt CF Terry Inc Stmt Prepare a statement of cash flows. (Amounts to be deducted shou ld be indicated with a minus sign.) TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash 0 0 Ending cash balance