The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Beginning Balances $6,140 3,150 7,310 1,980 Account Titles Cash Inventory Common Stock Retained Earnings The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,170. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash. 3. Returned $485 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $295 allowance. 5. Sold merchandise that cost $2,670 for $4,920 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $195 cash. 7. Paid $2,980 on the merchandise purchased in Event 1.
The beginning account balances for Terry's Auto Shop as of January 1, Year 2, follow: Beginning Balances $6,140 3,150 7,310 1,980 Account Titles Cash Inventory Common Stock Retained Earnings The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,170. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash. 3. Returned $485 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received a $295 allowance. 5. Sold merchandise that cost $2,670 for $4,920 cash. 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $195 cash. 7. Paid $2,980 on the merchandise purchased in Event 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ht.2.
![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:
Beginning Balances
$6,140
3,150
7,310
1,980
Account Titles
Cash
Inventory
Common Stock
Retained Earnings
The following events affected the company during the Year 2 accounting period:
1. Purchased merchandise on account that cost $4,170.
2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash.
3. Returned $485 of damaged merchandise for credit on account.
4. Agreed to keep other damaged merchandise for which the company received a $295 allowance.
5. Sold merchandise that cost $2,670 for $4,920 cash.
6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $195 cash.
7. Paid $2,980 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.)
Events
Beg. Bal.
1.
2.
3.
4.
5a.
5b.
6.
7.
End Bal.
Cash
Assets
+ Inventory
+
+ + + + + + +
+
TERRY'S AUTO SHOP
Effect of Events on the Financial Statements
Liabilities + Stockholders' Equity
Accounts
Payable
Retained
Earnings
0 +
0 =
+
+
+ + + + + + + + +
0 +
Common
Stock
+
+
+++++++++
0 +
0
Accounts Titles for Retained
Earnings](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00a2e412-d801-42da-87a8-c8c387a19437%2F9d4f914f-3094-4e33-8439-123f55612cb7%2Fh56r1m_processed.png&w=3840&q=75)
Transcribed Image Text: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:
Beginning Balances
$6,140
3,150
7,310
1,980
Account Titles
Cash
Inventory
Common Stock
Retained Earnings
The following events affected the company during the Year 2 accounting period:
1. Purchased merchandise on account that cost $4,170.
2. The goods in Event 1 were purchased FOB shipping point with freight cost of $235 cash.
3. Returned $485 of damaged merchandise for credit on account.
4. Agreed to keep other damaged merchandise for which the company received a $295 allowance.
5. Sold merchandise that cost $2,670 for $4,920 cash.
6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $195 cash.
7. Paid $2,980 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.)
Events
Beg. Bal.
1.
2.
3.
4.
5a.
5b.
6.
7.
End Bal.
Cash
Assets
+ Inventory
+
+ + + + + + +
+
TERRY'S AUTO SHOP
Effect of Events on the Financial Statements
Liabilities + Stockholders' Equity
Accounts
Payable
Retained
Earnings
0 +
0 =
+
+
+ + + + + + + + +
0 +
Common
Stock
+
+
+++++++++
0 +
0
Accounts Titles for Retained
Earnings
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