Answer:
A. Description for :
Transaction 1 - Provided catering service for cash
Transaction 2 - Purchase of land for cash
Transaction 3 - Payment of cash for expenses
Transaction 4 - Purchase of supplies on account
Transaction 5 - Withdrawal of cash by owner
Transaction 6 - Payment of cash to creditors
Transaction 7 - Recognition of cost of supplies used
B. The amount of the net decrease in cash during the month = 13,900
C. The amount of the net increase in owner's equity during the month = 3700
D. The amount of the net income for the month = 5500
E. The net income for the month was retained in the business = 3700
Explanation:
a)
Description for :
Transaction 1 - Provided catering service for cash
Transaction 2 - Purchase of land for cash
Transaction 3 - Payment of cash for expenses
Transaction 4 - Purchase of supplies on account
Transaction 5 - Withdrawal of cash by owner
Transaction 6 - Payment of cash to creditors
Transaction 7 - Recognition of cost of supplies used
b.)
Net decrease = Closing Balance - opening Balance
= 27,600 - 13,700
= 13,900
⇒The amount of the net decrease in cash during the month = 13,900
c.)
Net increase in owner's equity = ( Opening capital balance - Drawing + Income earned during the year - Expenses incurred during the year ) - Opening capital
⇒Net increase = ( 92,700 - 1800 + 32,300 - 26,800 ) - 92,700
= 96,400 - 92,700 = 3700
⇒The amount of the net increase in owner's equity during the month = 3700
d.)
Amount of the net income for the month = Total Income - Expenses
= 32,300 - 26,800
= 5500
⇒Amount of the net income for the month = 5500
e.)
Net income for the month was retained in the business = Net Income - Drawings
⇒Net income was retained in the business = 5500 - 1800
= 3700
⇒Net income for the month was retained in the business = 3700
