Question

! of 3 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, follow. Account Titles Beginning Balances Inventory 3,190 7,490 Retained Earnings 1,710 Cash $6,010 Common Stock The following events affected the company during the Year 2 accounting period eBook Print 1. Purchased merchandise on account that cost $4,100 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $270 cash. 3. Returned $430 of damaged merchandise for credit on account 4. Agreed to keep other damaged merchandise for which the company received a $285 allowance 5. Sold merchandise that cost $2,680 for $4,810 cash 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $190 cash. 7. Paid $2.980 on the merchandise purchased in Event 1 References 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) TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets Liabilities Stockholders' Equity Accounts Common Retained Inventory Payable Stock Earnings Cash Accounts Titles for Retained Earnings Events Bog Bal 1 2 ME S Prov

Answer 1

Answer is attached below

Answer a Event Beg. Bal. 1 + + 2 TERRY'S AUTO SHOP Effect of Events on the Financial Statements Assets = Liabilities + Stockholders' Equity Cash + Inventory = Accounts + Common + Retained Account Titles for Retained Payable Stock Earnings Earnings 6,010 + 3,190 = + 7,490 + 1,710 4,100 4,100 + (270) + 270 = (430) (430) + (285) = (285) + 4,810 + + 4,810 Sales revenue (2,680) = (2,680) Cost of goods sold (175) + (175) Freight Out expenses (2,980) + (2,980) + + 7,395 + 4,165 405 + 7,490 + 3,665 + + 3 + + 4 + + - + 5a 5b + + + 6 + + 7 End. Bal. II