David Saros operates his own catering service. Summary financial data for August 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 stockholders’ equity, except transaction (4), affects net income.
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 retained earnings 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?
f. What is the amount of net cash flows from operating activities?
g. What is the amount of net cash flows from investing activities?
h. What is the amount of net cash flows from financing activities?