Question

[The following information applies to the questions displayed below.] The beginning account balances for Terry’s Auto Shop as of January 1, Year 2, follows:

Required Information [The following Information applies to the questions displayed below.) The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follows: Account Titles Cash Inventory Common Stock Retained Earnings Beginning Balances $16,800 8,000 20,eee 4,880 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $15,000. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $800 cash. 3. Returned $2,600 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $1,100 allowance. 5. Sold merchandise that cost $15,000 for $31,000 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $500 cash. 7. Pald $8,000 on the merchandise purchased in Event 1. b. Prepare an Income statement and a statement of cash flows for Year 2. (Assume that closing entries have been made.) Complete this question by entering your answers in the tabs below. Terry Inc Stmt Terry Stmt CF Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Operating expenses

Answer 1

Answer Income Statement - Income Statement is one of the most important part of the financial statement which shows the fines);) result of the entibus operations financial result is shown in the form of Det Income / loss Income Iloss is calulated by the formula of Tota) Redelideó Tess Toty) Gosts god 'Expenses _TERRY'S_AUTO SHOP Income statement for the year ended December 31, Year 2 Aml$2. 31000 |(1500) Parthy) ais Net Sales Beveques - Cost of Gook sold Gosi Profit : Operating Expenses Tas sportation_Out Fylgght_from_Desting ton) 16000 (500) Net Income 15500 Cubo flow Stobregent - Cash flow Styremen & shows the inflow and outflows of cash_in_the_organisation_17 the form of revenues and expenses Inflows and outflows of cash ane djujel into three activites like_opera 1977, Investing and fjagacing actiile, It is the best measure as it helpyl to show cash invertments made

Yegua Amb. Sa TERRY'S AUTO SHOP Statement_of_9342_flows for the year ender December | S Portily) guj lant.c$7 I Cash flowr hom operating activities Cash sales | 31000 Doypreol to Account Paygbles e (8000) Payment for sieght -19 (800) Payment for Belght. oyz (500) Net Goh flows from operating Activities 2 too Gh Cath flows flows hom Gom Investing finning Activites Activitas 2) 70o Inweare in ash ti Beginine Guth Balance 16000 37 7oo Ending Gsh Balance