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 3,140 7,470 1,740 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 $240 cash. 3. Returned $435 of damaged merchandise. 4. Agreed to keep other damaged merchandise for which the company received a $265 allowance. 5. Sold merchandise that cost $2,740 for $4,810 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with transportation costs amounting to $185 cash. 7. Paid $2,980 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.) TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets = Liabilities + Stockholders' Equity Common Retained + Stock Earnings Events Cash + Accounts Payable Inventory + Accounts Titles for Retained Earnings Beg. Bal. 6,070[ + 0 + + 1. Pur. Inv. 0 + + 01 + 0 2. Transport + 01 + 01 + 0 3. Ret. Inv. 01 + = + 01 + 0 + + 4. Allow. 0 = 0 + 0 + 5a. Sales Sales 5b. Cost O Cost of sales 6. Tran. + + + 7. Paid AP + + 0 + Oo End Bal. 6,070 + 0= 0+ 0+