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: Account Titles Cash Inventory Common Stock Retained Earnings Total Debit Credit $ 16,000 8,000 $ 20,000 4,000 $ 24,000 $ 24,000 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 an $1100 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. 8. Paid $9,000 cash for operating expenses. E. Prepare a multistep income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made. Income Statement Balance Sheet Statement of Cash Flows Prepare a balance sheet. TERRY'S AUTO SHOP Balance Sheet As of December 31, Year 2 Assets Total assets $ $ 0 Liabilities Total liabilities $ 0 Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity 0 $ 0 Income Statement Balance Sheet Statement of Cash Flows Prepare a statement of cash flows. (Assume that closing entries have been m minus sign.) TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities: $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash 0 Ending cash balance $ $ 0 Income Statement Balance Sheet Statement of Cash Flows Prepare an income statement. TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, Year 2 Net sales $ 31,000 Cost of goods sold 15,000 Gross margin 16,000 Operating expenses Transportation-out 500 Net income 15,500 $