At the beginning of 2005, the C. Eaton Company had the following balances in its accounts: During

Question:

At the beginning of 2005, the C. Eaton Company had the following balances in its accounts:

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During 2005, the company experienced the following events.
1. Purchased inventory with a list price of $$3,000$ on account from Blue Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $$150$ were paid in cash.
2. Returned $$300$ 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 but not within the cash discount period.
4. Sold inventory with a list price of $$6,000$ and a cost of $$3,500$ on account, under terms 2/10, n/45.
5. Received returned merchandise from a customer. The merchandise originally cost $$400$ and was sold to the customer for $$650$ cash. The customer was paid $$650$ cash for the returned merchandise.
6. Delivered goods in Event 4 FOB destination. Freight costs of $$80$ were paid in cash.
7. Collected the amount due on the account receivable but not within the discount period.
8. Took a physical count indicating that $$8,300$ of inventory was on hand at the end of the accounting period.
Required:

a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).

b. Record each event in a statements model like the following one.

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