Reference no: EM132363355

Question

Nature of Transactions

Teri West operates her 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 stockholders' equity, except transaction (5), affects net income.

Assets=Liabilities + Stockholders' Equity Cash + Supplies + Land=Accounts Payable+Capital Stock+Retained Earnings-Dividends+Fees Earned-ExpensesBal.28,6003,70071,500 7,700 31,100 65,000 1.+33,500 33,500 2.-14,300 +14,300 3.-24,900 -24,9004. +1,400 +1,400 5.-1,900 -1,900 6.-6,900 -6,900 7. -2,900 -2,900Bal.14,1002,20085,800 2,200 31,100 65,000 -1,900 33,500 -27,800

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? Enter decrease as a positive number.

c. What is the amount of the net increase in stockholders' 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?