The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Beginning...

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The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Beginning Balances $6,160 3,140 7,350 1,950 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,120. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash. 3. Returned $475 of damaged merchandise for credit on account. Account Titles Cash Inventory Common Stock Retained Earnings 4. Agreed to keep other damaged merchandise for which the company received a $240 allowance. 5. Sold merchandise that cost $2,730 for $4,810 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $170 cash. 7. Paid $2,920 on the merchandise purchased in Event 1. 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 table, provide appropriate account titles for the Retained Earnings amounts. (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.) b. Prepare an income statement and a statement of cash flows for Year 2. (Assume that closing entries have been made.). The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Beginning Balances $6,160 3,140 7,350 1,950 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,120. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash. 3. Returned $475 of damaged merchandise for credit on account. Account Titles Cash Inventory Common Stock Retained Earnings 4. Agreed to keep other damaged merchandise for which the company received a $240 allowance. 5. Sold merchandise that cost $2,730 for $4,810 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $170 cash. 7. Paid $2,920 on the merchandise purchased in Event 1. 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 table, provide appropriate account titles for the Retained Earnings amounts. (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.) b. Prepare an income statement and a statement of cash flows for Year 2. (Assume that closing entries have been made.).