Question

Cascade Company was started on January 1, 2018, when it acquired $159,000 cash from the owners. During 2018, the company earned cash revenues of $89,600 and incurred cash expenses of $68,600. The company also paid cash distributions of $8,500. Required Prepare a 2018 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.) Cascade is a corporation. It issued 9,000 shares of $12 par common stock for $159,000 cash to start the business.

Answer 1

Income statement :

Revenue	89600
Less: Expense	-68600
Net income	21000

Statement of changes in equity ;

Beginning balance	159000
Add: Net income	21000
Less: Distribution	-8500
Ending balance	171500

Balance sheet :

Assets
Cash	171500
Total assets	171500
Liabilities & Owner's equity
Liabilities
Owner's equity	171500
Total liabilties and owner's equity	171500

Statement of cash flow

Cash flow from operating activities
Cash received from customer	89600
Cash Paid for expense	-68600
Net cash flow from operating activities	21000
Cash flow from investing activities
Cash flow from financing activities
Issue common stock	159000
Cash distribution	-8500
Net cash flow from financing activities	150500
Net cash flow	171500