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?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter3: Basic Accounting Systems: Accrual Basis
Section: Chapter Questions
Problem 3.5E: Accrual basis of accounting Margie Van Epps established Health Services, P.C., a professional...
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