Joe Norwood 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 owners’ 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?

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Bal. 1. 2. 3. 4. Cash 5,500 +16,000 - 2,000 -11,250 - 1,950 5. - 2,300 + Supplies + Land 1,350 29,000 + 2,000 = Capital Retained Liabilities Stock + Earnings 4,350 10,000 21,500 +16,000 -11,250 - 1,950 - -2,300 6. 800 Bal. 4,000 550 31,000 2,050 10,000 800 23,500