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 Cash $6, 110 Inventory 3, 110 Common Stock 7,330 Retained Earnings 1,890 The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,220. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $215 cash. 3. Returned $405 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $275 allowance. 5. Sold merchandise that cost $2,650 for $4,870 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $125 cash. 7. Paid $2,820 on the merchandise purchased in Event 1 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 Common Accounts Retained Accounts Titles for Cash + Inventory - Payable Stock Earnings Retained Earnings = + + = Events Beg. Bal. 1. 2. 3 4 5a. 5b. 6 7. End Bal 0+ 0