- 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, and +/- for increase and decrease 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 Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity.) REDD COMPANY Effect of Events on the Financial Statements for Year 2 Balance Sheet Income Statement Event Event No. Statement of Assets = Liabilities + Stockholders' Equity Revenue Expenses Net Income Cash Flows 1a AS + + 1b AE +/- OA 2 3b 4a 4b 5a 5b 6 7a 7b 8 9 10 Show less