90.2K

Verified Solution

Link Copied!

Nature of Transactions effect of a transaction on the equation. Each increase and decrease in owner's equity, except transaction $(5),$ affects net income.

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

Provided catering services for cash. $$

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

Purchase of land for cash.

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

Payment of cash for expenses. $$

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

Purchase of supplies on account.

$$

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

Purchase of supplies on account.

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

Withdrawal of cash by owner. $$

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

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

Recognition of cost of supplies used.

b$.$ What is the amount of the net decrease 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?

Nature of Transactions 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

Bal. $27,200,3,500,68,0007,30091,400$

$+31,800$

$-13,600+13,600+31,800$

$-23,700$

$,+1,400+1,400$

$-23,700$

$-1,800$

$-6,500$

$-1,800$

$-2,700$

Bal. $13,400,2,200,81,600$

$2,200$

$91,400,-1,800$

$31,800$

$\frac{-2,700}{-26,400}$

Answer & Explanation Solved by verified expert

See Answer