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 Cash Inventory Common Stock Retained Earnings Beginning Balances $6,180 3,020 7,480 1,720 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 transportation cost of $280 cash. 3. Returned $445 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $225 allowance. 5. Sold merchandise that cost $2,660 for $4,840 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $150 cash. 7. Paid $2,830 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 Incorporated Statement Terry Statement Cash Flow Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Operating expenses 0 $ 0 < Terry Incorporated Statement Terry Statement Cash Flow > 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 Cash Inventory Common Stock Retained Earnings Beginning Balances $6,180 3,020 7,480 1,720 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 transportation cost of $280 cash. 3. Returned $445 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $225 allowance. 5. Sold merchandise that cost $2,660 for $4,840 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $150 cash. 7. Paid $2,830 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 Incorporated Statement Terry Statement Cash Flow Prepare a statement of cash flows. Note: Cash outflows should 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 $ 0 Cash flows from investing activities Cash flows from financing activities Net change in cash 0 Ending cash balance $ 0 < Terry Incorporated Statement Terry Statement Cash Flow >