Check my Required information [The following information applies to the questions displayed below.) At the beginning of Year 2, the Redd Company had the following balances in its accounts: Cash Inventory Land Common stock Retained earnings $17,800 8,000 2,800 17,eee 11,600 During Year 2, the company experienced the following events: 1. Purchased inventory that cost $12,000 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $880 were paid in cash. 2. Returned $850 of the inventory it had purchased from Ross Company because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Ross Company within the cash discount period. 4. Sold inventory that had cost $8,500 for $16,500 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $1,600 and was sold to the customer for $2.900 cash. The customer was paid $2,900 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $770 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Sold the land for $5,100. 9. Recognized accrued interest income of $650. 10. Took a physical count indicating that $7,300 of inventory was on hand at the end of the accounting period. (Hint: Determine the current balance in the inventory account before calculating the amount of the inventory write down) 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, +- for increase and 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. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NA for not affected.) Event No. Event Type REDD COMPANY Effect of Events on the Financial Statements for Year 2 Balance Sheet Income Statement Stk. Net Assets = Liabilities Revenue - Expenses Equity Income NA NA NA +1 NA NA NA NA NA Statement of Cash Flows NA NA 1a. AS AE NA 1b. 2 30. Disc 3b. Pay 48. Sale 4b. Cost 5a. Ret Rev 5b. Ret Cost 5. Fit 7. Disc 7. Coll 3. Land 9. In 10. Adi