Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 8

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 owner's equity, except transaction (5), affects net income.

a. Describe each transaction.
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