Reference no: EM13545566

Nature of transactions

Jeremy Zabel operates his own catering service. Summary financial data for February 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.

	Assests			=	Liabilities +		Owner's Equity
					Accounts	Jeremy Zabel,	Jeremy Za-	Fees
	Cash	+Supplies	+Land	=	Payable	+ Capital	- bel, Drawing	+ Earned	- Expenses
	25,000	2,000	75,000		12,000	90,000
1	+ 29,000							29,000
2	-20,000		+ 20,000
3	-14,000								-14,000
4		+ 1,000			+ 1,000
5	- 2,000						- 2,000
6	- 7,000				-7,000
7		-1800							-1,800
	11,000	1,200	95,000		6,000	90,000	- 2,000	29,000	-15,800

a. Describe each transaction.

b. What is the amount of net decrease in cash during the month?

c. What is the amount of 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?