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Exercise $4-12$A $($Algo$)$ Effect of purchase returns and allowances and transportation costs on the financial statements: perpetual system LO $4-2,4-4,4-6$

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$[$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 Beginning Balances

Cash $ $6,010$

Inventory $3,100$

Common Stock $7,500$

Retained Earnings $1,610$

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

Purchased merchandise on account that cost $$4,280.$

The goods in Event $1$ were purchased FOB shipping point with freight cost of $$250$ cash.

Returned $$435$ of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received a $$275$ allowance.

Sold merchandise that cost $$2,580$ for $$4,810$ cash.

Delivered merchandise to customers in Event $5$ under terms FOB destination with freight costs amounting to $$140$ cash.

Paid $$2,810$ on the merchandise purchased in Event $1.$

Exercise $4-12$A $($Algo$)$ Part a

Required

a$.$ Organize appropriate ledger accounts under an accounting equation. Record the beginning balances and the transaction data in the accounts. In the last column of the tale, provide appropriate account titles for the Retained Earnings amounts.

Note: Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not every cell will require entry. Requlred Information

Exercise $4-12$A $($Algo$)$ Effect of purchase returns and allowances and transportation costs on the financial statements: perpetual system LO $4-2,4-4,4-6$

$[$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:

$\backslash$table$[[$Account Titles,Beginning Balances$],[$Cash$,$$$6,010],[$Inventory$,3,100],[$Common Stock,$7,500],[$Retained Earnings,$1,610]]$

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

Purchased merchandise on account that cost $$4,280.$

The goods in Event $1$ were purchased FOB shipping point with freight cost of $$250$ cash.

Returned $$435$ of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received a $$275$ allowance.

Sold merchandise that cost $$2,580$ for $$4,810$ cash.

Delivered merchandise to customers in Event $5$ under terms FOB destination with freight costs amounting to $$140$ cash.

Paid $$2,810$ on the merchandise purchased in Event $1.$

Exerclse $4-12$A $($Algo$)$ Part a

Required

a$.$ Organize appropriate ledger accounts under an accounting equation. Record the beginning balances and the transaction data in the accounts. In the last column of the tale, provide appropriate account titles for the Retained Earnings amounts.

Note: Enter any decreases to account balances with a minus slgn$.$ If there is no effect on the Accounts Titles for Retalned Earnings, leave the cell blank. Not every cell will require entry.

TERRY'S AUTO SHOP

$\backslash$table$[[$Effect of Events on the Financial Statements$],[$Events$,$Assets,$\backslash$table$[[\backslash$table$[[=],[=]]]],\backslash$table$[[$Liabilities$],[$Accounts$],[$Payable$]],,$Stockholders' Equity,$\backslash$table$[[$Account Titles for Retained$],[$Earnings$]]],[$Cash$,+,$Inventory,,$\backslash$table$[[$Common$],[$Stock$]],+,\backslash$table$[[$Retained$],[$Earnings$]]],[$Beginning Balance,,$+,,=,,+,,+,,],[1.,,+,,=,,+,,+,,],[2.,,+,,=,,+,,+,,],[3.,,+,,=,,+,,+,,],[4.,,+,,=,,+,,+,,],[5$a$.,,+,,=,,+,,+,,],[5$ b$.,,+,,=,,+,,+,,],[6.,,+,,=,,+,,+,,],[7.,,+,,=,,+,,+,,],[$Ending Balance,,$+,,=,,+,,+,,]]$