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: Beginning Balances Account Titles Cash Inventory Common Stock Retained Earnings $ 6,070 3,150 7,360 1,860 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 $215 cash. 3. Returned $425 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $240 allowance. 5. Sold merchandise that cost $2,560 for $4,840 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $160 cash. 7. Paid $2,900 on the merchandise purchased in Event 1.