At the beginning of 2011, the Jeater Company had the following balances in its accounts: During 2011

Question:

At the beginning of 2011, the Jeater Company had the following balances in its accounts:
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During 2011 , the company experienced the following events.
1. Purchased inventory that cost $\$ 2,200$ on account from Blue Company under terms $1 / 10, \mathrm{n} / 30$. The merchandise was delivered FOB shipping point. Freight costs of $\$ 110$ were paid in cash.
2. Returned $\$ 200$ of the inventory that it had purchased because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.
3. Paid the amount due on its account payable to Blue Company within the cash discount period.
4. Sold inventory that had cost $\$ 3,000$ for $\$ 5,500$ on account, under terms $2 / 10, n / 45$.
5. Received merchandise returned from a customer. The merchandise originally cost $\$ 400$ and was sold to the customer for $\$ 710$ cash. The customer was paid $\$ 710$ cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $\$ 60$ were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $\$ 7,970$ of inventory was on hand at the end of the accounting period.

Required

a. Identify each of these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each event would affect the financial statements by placing a + for increase, - for decrease, or NA for not affected under each of the components in the following statements model. Assume that the perpetual inventory method is used. When an event has more than one part, use letters to distinguish the effects of each part. The first event is recorded as an example.
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