Question

Required information The following information lies to the questions displayed below The beginning account balances for Terry's Auto Shop as of January 1 Year 2. folow Account Titles Torventory Co Stock Betained Earnings Beginning balances $5,11 3,190 1.10 1,98 The following events aftected the company during the Year 2 accounting period: 1. Purchased mercluindise on account that cost $4 200, 2. The goods in Event I were purchased FOB shipping point with freight cost of $245 cash 3. Returned 5455 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received a $270 allowance 5. Sold merchandise that cost $2.650 for $4,810 cash 6. Delivered merchandise to customers in Events under terms FOB destination with eight costs amounting to $150 cash. 7. Paid 52,820 on the merchandise purchased in Event 1

Answer 1

Answer: Event + + II II + Beg Bal 1 2 3 NA TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets Liabilities + Stockholders' Equity Accounts Common Retained Accounts Titles for Cash + Inventory Payable Stock Earnings Retained Earnings 6,110 + 3,190 + 7,320 + 1,980 4,200 4,200 + + -245 245 -455 -455 + + -270 -270 4,810 4,810 Sales + -2,660 = + -2,660 Cost of Goods sold -150 + -150 Freight Out -2,820 + -2,820 + 7,705 + 4,250 = 655 + 7,320 + 3,980 + + + + + 4 II + + + 11 + + + 5a 5b 6 7 End Bal = + + + +