Question

Cheryl Alder operates her own catering service. Summary financial data for March are presented in the following equation form. Each line, designated by a number, indicates the effect of a transaction on the balance sheet. Each increase and decrease in retained earnings, except transaction (4), affects net income. Cash + Land = Liabilities + Common Stock + Retained EarningsBal. 40,000 100,000 16,000 24,000 100,000 (1) 28,000 28,000 (2) (20,000) 20,000(3) (18,000) (18,000)(4) (1,000) (1,000)Bal. 29,000 120,000 16,000 24,000 109,000(a) Enter the amount for each transaction described below.(1) Provided catering services for cash $ _____(2) Purchase of land for cash $____(3) Payment of expenses $ ____(4) Payment of cash dividends $ ____

Answer 1

1. $28,000

2. $20,000

3. $18,000

4. $1,000

Step-by-step explanation:

(1) Provided catering services for cash $28,000

It affects the cash balance negatively while affecting the retained earning balance positively.

(2) Purchase of land for cash $20,000

It affects the cash balance negatively while affecting the land balance positively.

(3) Payment of expenses $18,000

It affects the cash balance negatively while affecting the retained earning balance positively.

(4) Payment of cash dividends $1,000

It affects the cash balance negatively while affecting the retained earning balance positively.