50.1K

Verified Solution

Link Copied!

Typewritten answers only, please, no handwritten answers. Thank you.

The beginning account balances for Terrys Auto Shop as of January 1, 2018, follows:

Account Titles	Beginning Balances
Cash	$	6,040
Inventory		3,180
Common Stock		7,430
Retained Earnings		1,790

The following events affected the company during the 2018 accounting period:

Purchased merchandise on account that cost $4,260.

The goods in Event 1 were purchased FOB shipping point with freight cost of $285 cash.

Returned $420 of damaged merchandise for credit on account.

Agreed to keep other damaged merchandise for which the company received an $265 allowance.

Sold merchandise that cost $2,600 for $4,840 cash.

Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $115 cash.

Paid $2,990 on the merchandise purchased in Event 1.

Prepare an income statement and a statement of cash flows for 2018. (Assume that closing entries have been made.)

Prepare an income statement.

TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, 2018 Operating expenses Prepare a statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.) TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, 2018 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance Typewritten answers only, please, no handwritten answers. Thank you.

Answer & Explanation Solved by verified expert

See Answer