Exercise 3-3 Effect of inventory transactions on financial statements: Perpetual system LO 3-1 Justin Swords started a small merchandising business in 2014. The business experienced the following events during its first year of operation. Assume that Swords uses the perpetual inventory system. 1. Acquired S46,000 cash from the issue of common stock. 2. Purchased inventory for S28,000 cash. 3. Sold inventory costing S18,000 for $30,000 cash. Required a. Record the events in a statements model like the one shown below. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) JUSTIN SWORDS MERCHANDISING Effect of Events on Fianancial Statements Assets Stockholders' Equity Cash Inventory mon Retained Revenue Expenses Net Statement of Cash Income Flows Stoc Earnin Event 1. 46,000 46,000 46,000 FA 3a. 3b Total