Nature of transactions Teri West owns and 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. Assets = Liabilities + Cash + Supplies + Land= Accounts Payable + Teri West, Capital Bal. 24,000 3,100 60,000 80,600 1. +28,100 -12,000 -20,900 2. 3. 4. -1,600 -5,800 +1,200 5. 6. 7. Bal. 11,800 a. (1) Select the description for transaction 1. +12,000 -2,400 1,900 72,000 a. (2) Select the description for transaction 2. a. (3) Select the description for transaction 3. a. (4) Select the description for transaction 4. 6,500 +1,200 -5,800 1,900 80,600 Teri West, Drawing + -1,600 Owner's Equity -1,600 Fees Earned - Expenses Fees Earned 28,100 28,100 -20,900 -2,400 -23,300

Nature of transactions Teri West owns and 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. Assets = Liabilities + Cash + Supplies + Land= Accounts Payable + Teri West, Capital Bal. 24,000 3,100 60,000 80,600 1. +28,100 -12,000 -20,900 2. 3. 4. -1,600 -5,800 +1,200 5. 6. 7. Bal. 11,800 a. (1) Select the description for transaction 1. +12,000 -2,400 1,900 72,000 a. (2) Select the description for transaction 2. a. (3) Select the description for transaction 3. a. (4) Select the description for transaction 4. 6,500 +1,200 -5,800 1,900 80,600 Teri West, Drawing + -1,600 Owner's Equity -1,600 Fees Earned - Expenses Fees Earned 28,100 28,100 -20,900 -2,400 -23,300

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Description: Nature of transactionsTeri West owns and 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 theequation. Each increa

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter2: Analyzing Transactions

Section: Chapter Questions

Problem 4MAD: Analyze Target The following data (in millions) are taken from the financial statements of Target...

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Nature of transactionsTeri West operates her own catering service. Summary financial data forJuly are presented in equation form as follows. Each line designated by anumber indicates the effect of a transaction on the equation. Eachincrease and decrease in owner's equity, except transaction (5), affectsnet 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 themonth? 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 thebusiness?
FIN ANCIAL RATIO S Based on the financial statements for Jackson Enterprises (income statement, statement of owner’s equity, and balance sheet) shown on pages 596–597, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $21,600.1. Working capital2. Current ratio3. Quick ratio4. Return on owner’s equity5. Accounts receivable turnover and average number of days required to collect receivables6. Inventory turnover and average number of days required to sell inventory
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Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
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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?
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