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TERRY'S AUTO SHOP Balance Sheet As of December 31, Year 2 $$\text{Unknown environment 'tabular'}$$ Complete this question by entering your ansv Prepare an income statement. $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ Required information [The following information applies to the questions displayed below] The trial balance for Terry's Auto Shop as of January 1, Year 2, follows: 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 recelved an $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. Paid $8,000 on the merchandise purchased in Event 1. 8. Paid $9,000 cash for operating expenses. d. Why does a difference exists botween net income and net cash flow from operating activities Multiple-choike The difference between net income and net cash fow from operating octwities exsts because of maintaining the iveenory records using the perpetual inventory system. The difference between net income and net cash fiow from operating activities exists because operating expenses are not required be to accounted for when determining net income. The difference between net income and net cash flow from operating activies exists because the shop is not selling all the inventory that it purchased during the period 2 of 4 $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ $$\text{Unknown environment 'tabular'}$$ (1) Required information $$\text{Unknown environment 'tabular'}$$

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