The trial balance for Terrys Auto Shop as of January 1, Year 2, follows: Account Titles Debit Credit Cash $ 14,850 Inventory 3,120 Common Stock $ 7,330 Retained Earnings 10,640 Total $ 17,970 $ 17,970 The following events affected the company during the Year 2 accounting period: Purchased merchandise on account that cost $4,300. The goods in Event 1 were purchased FOB shipping point with freight cost of $210 cash. Returned $465 of damaged merchandise for credit on account. Agreed to keep other damaged merchandise for which the company received an $225 allowance. Sold merchandise that cost $2,660 for $13,000 cash. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $135 Paid $2,880 on the merchandise purchased in Event 1. Paid $8,800 cash for operating expenses. Prepare a multistep income statement, a balance sheet, and a statement of cash flows. (Assume that closing entries have been made.)