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TERRY'S AUTO SHOP Balance Sheet As of December 31, Year 2 \begin{tabular}{|l|l|l|} \hline Assets & \multicolumn{1}{|c|}{} \\ \hline Cash & & \\ \hline Inventory & & \\ \hline & & \\ \hline Total assets & & \\ \hline Liabilities & & \\ \hline Accounts payable & & \\ \hline & & \\ \hline Total liabilities & & \\ \hline Stockholders' equity & & \\ \hline Common stock & & \\ \hline Retained earnings & & \\ \hline & & \\ \hline Total stockholders' equity & & \\ \hline Total liabilities and stockholders' equity & & \\ \hline \end{tabular} Complete this question by entering your ansv Prepare an income statement. \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ TERRY'S AUTO SHOP } \\ \hline \multicolumn{3}{|c|}{ Statement of Cash Flows } \\ \hline \multicolumn{3}{|c|}{ For the Year Ended December 31, Year 2} \\ \hline \multicolumn{3}{|l|}{ Cash flow from operating activities: } \\ \hline \multicolumn{3}{|l|}{7} \\ \hline \\ \hline \\ \hline \\ \hline Net cash flow from operating activities & $ & 0 \\ \hline \multicolumn{3}{|l|}{ Cash flows from investing activities } \\ \hline \multicolumn{3}{|l|}{ Cash flows from financing activities } \\ \hline \multirow[t]{2}{*}{ Net change in cash } & & 0 \\ \hline & & \\ \hline Ending cash balance & $ & 0 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow[t]{2}{*}{ l } & G & OB & Transportation-out & & \\ \hline & & & Cash & & \\ \hline \multirow{4}{*}{ l } & & 07 & & & \\ \hline & & & Accoounts payable & 8,000 & \\ \hline & & & Cash & & 8,000 \\ \hline & & & & & \\ \hline \multirow[t]{2}{*}{} & 1 & 08 & Operating expenses & 9,000 & \\ \hline & & & Cash & & 9,000 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline \multicolumn{3}{|c|}{ Retalned Earnings } \\ \hline & & & \\ \hline & & & \\ \hline Beg. Bal & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Sales Revenue } \\ \hline Beg. Bal & & \\ \hline ? & 31,000 & 5a \\ \hline & & \\ \hline End. Bal & 31,000 & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Transportation-out } \\ \hline Beg. Bal & & \\ \hline 6. & 500 & \\ \hline End. Bal & 500 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{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 \begin{tabular}{|l|r|r|r|} \hline Beg. Bal & \multicolumn{3}{|c|}{ Cash } \\ \hline Sa. & 31,000 & 800 & 2. \\ \hline & & 500 & 6. \\ \hline & & 8,000 & 7. \\ \hline & & 9,000 & 8. \\ \hline & & & \\ \hline & & & \\ \hline End. Bal & 12,700 & & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|r|} \hline \multicolumn{3}{|c|}{ Accounts Payable } \\ \hline Beg. Bal & & & \\ \hline 3. & 2,600 & 15,000 & 1. \\ \hline 4. & 1,100 & & \\ \hline 7. & 8,000 & & \\ \hline & & & \\ \hline & & & \\ \hline End. Bal & & 3,300 & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Beg. Bal & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Beg. Bal & & & \\ \hline & & & \\ \hline & & & \\ \hline End. Bal & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Sales Revenue } \\ \hline Beg. Bal & & \\ \hline & 31,000 & 5a \\ \hline & & \\ \hline End. Bal & 31,000 & \\ \hline \end{tabular} (1) Required information \begin{tabular}{|c|c|c|c|c|c|} \hline & No & Event & General Journal & Doblt & Credit \\ \hline & A & 01 & Inventory & 15,000 & \\ \hline & & & Acoounts payable & & 15,000 \\ \hline \multirow{4}{*}{} & E & 5a & Cash & 31,000 & \\ \hline & & +4 & Sales revenue & & 31,000 \\ \hline & F & 5b & Cost of goods sold & 15,000 & \\ \hline & & & Inventory & & 15,000 \\ \hline \multirow[t]{2}{*}{/} & G & 06 & Transportation-out & 500 & \\ \hline & & & Cash & & 500 \\ \hline & H & 07 & Accounts payable & 8.000 & \\ \hline & & & Cash & & B,000 \\ \hline & & & & & \\ \hline \end{tabular}

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