ates his own catering service. Summary financial data for July are presented in equation form as follows. Each line designated by a number indicates the effect of a transaction on the equation. Each increase and decrease in owner's equity, except transaction (5), affects net income.   Assets = Liabilities +   Owner's Equity   Cash + Supplies + Land = Accounts Payable + Kristoff

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Nature of Transactions

Teri West operates his own catering service. Summary financial data for July are presented in equation form as follows. Each line designated by a number indicates the effect of a transaction on the equation. Each increase and decrease in owner's equity, except transaction (5), affects net income.

  Assets = Liabilities +   Owner's Equity
  Cash + Supplies + Land = Accounts Payable + Kristoff Walker, Capital - Kristoff Walker, Drawing + Fees Earned - Expenses
Bal. 27,000 3,500 67,500   7,300   90,700            
1. +31,600                   +31,600    
2. -13,500   +13,500                    
3. -23,500                       -23,500
4.   +1,400     +1,400                
5. -1,800               -1,800        
6. -6,500       -6,500                
7.   -2,700                     -2,700
Bal. 13,300 2,200 81,000   2,200   90,700   -1,800   31,600   -26,200

a. (1)  Select the description for transaction 1.

 

a. (2)  Select the description for transaction 2.

 

a. (3)  Select the description for transaction 3.

 

a. (4)  Select the description for transaction 4.

 

a. (5)  Select the description for transaction 5.

 

a. (6)  Select the description for transaction 6.

 

a. (7)  Select the description for transaction 7.

 

 

b.  What is the amount of the net decrease in cash during the month?
$fill in the blank 8

c.  What is the amount of the net increase in owner's equity during the month?
$fill in the blank 9

d.  What is the amount of the net income for the month?
$fill in the blank 10

e.  How much of the net income for the month was retained in the business?
$fill in the blank 11

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