The trial balance for Terry$$s Auto Shop as of January $1,$ Year $2,$ follows:

Account Titles Debit Credit

Cash $ $18,000$

Inventory $9,000$

Common Stock $ $21,000$

Retained Earnings $6,000$

Total $ $27,000$ $ $27,000$

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

Purchased merchandise on account that cost $$18,000.$

The goods in Event $1$ were purchased FOB shipping point with freight cost of $$850$ cash.

Returned $$2,800$ of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received an $$1,200$ allowance.

Sold merchandise that cost $$18,000$ for $$36,000$ cash.

Delivered merchandise to customers in Event $5$ under terms FOB destination with freight costs amounting to $$500$ cash.

Paid $$8,500$ on the merchandise purchased in Event $1.$

Paid $$9,600$ cash for operating expenses.

Required

a$.$ Record the events in general journal format. b$.$ Open general ledger T$-$accounts with the appropriate beginning balances, and post the journal entries to the T$-$accounts. c$.$ Prepare a multistep income statement, balance sheet, and statement of cash flows. $($Assume that closing entries have been made.$)$