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 $6,070 3,070 7,430 1,710 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,160. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $205 cash. 3. Returned $485 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $235 allowance. 5. Sold merchandise that cost $2,640 for $4,940 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $100 cash. 7. Paid $2,800 on the merchandise purchased in Event 1.