David Saros operates his own catering service. Summary financial data for August are presented in… 1 answer below »

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.

 

 

 

 

 

 

Capital

 

Retained

Cash

+

Land

=

Liabilities

+

Stock

+

Earnings

Bal.

9,500

10,000

 

 

4,350

 

10,000

 

5,150

1.

+36,000

 

 

 

 

 

 

 

+36,000

2.

-15,000

+15,000

 

 

 

 

 

 

 

3.

-21,250

 

 

 

 

 

 

 

-21,250

4. Bal.

-1,500

 

 

 

 

 

 

 

-1,500

7,750

25,000

 

 

4,350

10,000

 

 

18,400

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?

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