Teri West operates her own catering service. Summary financial data for July are pre- sented 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 = Liabilities Owner's Equity Assets Accounts Teri West Teri West, Fees Supplies Land = Payable Drawing Earned - Expenses Cash Capital Bal 40,000 3,000 82,000 7,500 117,500 71,800 1 +71,800 2 -15,000 +15,000 -47,500 -47,500 3. 4. 1,100 +1,100 -5,000 5. -5,000 6 -4,000 -4,000 7. -1,500 -1,500 Bal. -5,000 40,300 2,600 97,000 4,600 117,500 71,800 -49,000 Describe each transaction а. b. What is the amount of the net increase in cash during the month? c. What is the amount of the net increase in owner's equity during the month? d. What is the amount of the net income for the month? e. How much of the net income for the month was retained in the business?
Teri West operates her own catering service. Summary financial data for July are pre- sented 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 = Liabilities Owner's Equity Assets Accounts Teri West Teri West, Fees Supplies Land = Payable Drawing Earned - Expenses Cash Capital Bal 40,000 3,000 82,000 7,500 117,500 71,800 1 +71,800 2 -15,000 +15,000 -47,500 -47,500 3. 4. 1,100 +1,100 -5,000 5. -5,000 6 -4,000 -4,000 7. -1,500 -1,500 Bal. -5,000 40,300 2,600 97,000 4,600 117,500 71,800 -49,000 Describe each transaction а. b. What is the amount of the net increase in cash during the month? c. What is the amount of the net increase in owner's equity during the month? d. What is the amount of the net income for the month? e. How much of the net income for the month was retained in the business?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Teri West operates her own catering service. Summary financial data for July are pre-
sented 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
= Liabilities
Owner's Equity
Assets
Accounts
Teri West
Teri West,
Fees
Supplies Land = Payable
Drawing Earned - Expenses
Cash
Capital
Bal
40,000
3,000
82,000
7,500
117,500
71,800
1
+71,800
2
-15,000
+15,000
-47,500
-47,500
3.
4.
1,100
+1,100
-5,000
5.
-5,000
6
-4,000
-4,000
7.
-1,500
-1,500
Bal.
-5,000
40,300
2,600
97,000
4,600
117,500
71,800 -49,000
Describe each transaction
а.
b. What is the amount of the net increase in cash during the month?
c. What is the amount of the net increase in owner's equity during the month?
d. What is the amount of the net income for the month?
e. How much of the net income for the month was retained in the business?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50f4802d-9959-4494-9dec-4c7db999a203%2Ffcdad888-a872-4c52-aecb-e26e7bba7abb%2Fqvov3pp.jpeg&w=3840&q=75)
Transcribed Image Text:Teri West operates her own catering service. Summary financial data for July are pre-
sented 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
= Liabilities
Owner's Equity
Assets
Accounts
Teri West
Teri West,
Fees
Supplies Land = Payable
Drawing Earned - Expenses
Cash
Capital
Bal
40,000
3,000
82,000
7,500
117,500
71,800
1
+71,800
2
-15,000
+15,000
-47,500
-47,500
3.
4.
1,100
+1,100
-5,000
5.
-5,000
6
-4,000
-4,000
7.
-1,500
-1,500
Bal.
-5,000
40,300
2,600
97,000
4,600
117,500
71,800 -49,000
Describe each transaction
а.
b. What is the amount of the net increase in cash during the month?
c. What is the amount of the net increase in owner's equity during the month?
d. What is the amount of the net income for the month?
e. How much of the net income for the month was retained in the business?
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