Exercise 2-27A Effect of accounting events on the income statement and statement of cash flows Required Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase, decrease, or NA) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. Cash Flows from Operating Activities Net Income Event/ Direction of Adjustment Change Amount of Change NA $2,250 Direction of Change Amount of Change NA Decrease Decrease NA $9,000 NA Adj