The trial balance for Terry’s Auto Shop as of January 1, 2016, follows:

The trial balance for Terry’s Auto Shop as of January 1, 2016, follows:

Account Titles	Debit			Credit
Cash	$	6,180
Inventory		3,130
Common Stock				$	7,350
Retained Earnings					1,960
Total	$	9,310		$	9,310

  

The following events affected the company during the 2016 accounting period:

1.	Purchased merchandise on account that cost $4,240.
2.	The goods in Event 1 were purchased FOB shipping point with freight cost of $295 cash.
3.	Returned $410 of damaged merchandise for credit on account.
4.	Agreed to keep other damaged merchandise for which the company received an $295 allowance.
5.	Sold merchandise that cost $2,640 for $4,920 cash.
6.	Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $105 cash.
7.	Paid $2,940 on the merchandise purchased in Event 1.

Required

a.		Record the events in general journal format.

 

b.  Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts.






c.   Prepare an income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made.)





Thank you!