The beginning account balances for Terrys Auto Shop as of January 1, Year 2, follow:

Account Titles	Beginning Balances
Cash	$ 6,060
Inventory	3,190
Common Stock	7,380
Retained Earnings	1,870

The following events affected the company during the Year 2 accounting period:

1. Purchased merchandise on account that cost $4,160.

The goods in Event 1 were purchased FOB shipping point with freight cost of $280 cash.

Returned $420 of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received a $235 allowance.

Sold merchandise that cost $2,690 for $4,840 cash.

Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $110 cash.

Paid $2,950 on the merchandise purchased in Event 1.

The beginning account balances for Terrys Auto Shop as of January 1, Year 2, follow:

Account Titles	Beginning Balances
Cash	$ 6,060
Inventory	3,190
Common Stock	7,380
Retained Earnings	1,870

The following events affected the company during the Year 2 accounting period:

1. Purchased merchandise on account that cost $4,160.

The goods in Event 1 were purchased FOB shipping point with freight cost of $280 cash.

Returned $420 of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received a $235 allowance.

Sold merchandise that cost $2,690 for $4,840 cash.

Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $110 cash.

Paid $2,950 on the merchandise purchased in Event 1.

Prepare an income statement.

TERRY'S AUTO SHOP
Income Statement
For the Year Ended December 31, Year 2
	0
Operating expenses
	$0

Prepare a statement of cash flows.

Note: Amounts to be deducted 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