The trial balance for The Copy Shop as of January 1, 2011 was as follows:

The following events affected the company during the 2011 accounting period:
1. Purchased merchandise on account that cost \(\$ 4,100\).
2. The goods in event 1 were purchased. FOB shipping point with freight cost of \(\$ 300\) cash.
3. Returned \(\$ 500\) of damaged merchandise for credit on account.
4. Agreed to keep other damaged merchandise for which the company received a \(\$ 250\) allowance.
5. Sold merchandise that cost \(\$ 2,750\) for \(\$ 4,750\) cash.
6. Delivered merchandise to customers under terms FOB destination with freight costs amounting to \(\$ 200\) cash.
7. Paid \(\$ 3,000\) on the merchandise purchased in Event 1.
Required

a. Record the transactions 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 an income statement and statement of cash flows for 2011.

d. Explain why a difference does or does not exist between net income and net cash flow from operating activities.

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Account Titles Debit Credit Cashi $6,000 Inventory 3,000 Common Stock $7,500 Retained Earnings 1,500 Total $9,000 $9,000