Question

Cascade Company was started on January 1, Year 1, when it acquired $152,000 cash from the owners. During Year 1, the company earned cash revenues of $80,700 and incurred cash expenses of $68,400. The company also paid cash distributions of $6,500.

Required
Prepare a Year 1 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 COMPANY
Capital Statement
For the Year Ended December 31, Year 1
Beginning capital balance
Plus: Capital acquired from owner
Plus: Net income
Ending capital balance	$0

CASCADE COMPANY
Balance Sheet
As of December 31, Year 1
Assets
Cash	$157,800
Total Assets		157,800
Liabilities		$0
Equity
Total liabilities and equity		$0

Answer 1

CASCADE COMPANY
Capital Statement
For the Year Ended December 31, Year 1
Beginning capital balance	$0
Plus: Capital acquired from owner	$152,000
Plus: Net income [80700 rev. -68400 exp.]	$12,300
(Less): Dividends	($6,500)
Ending capital balance	$157,800

.

CASCADE COMPANY
Balance Sheet
As of December 31, Year 1
Assets
Cash	$157,800
Total Assets		157,800
Liabilities	$0
Equity	$157,800
Total liabilities and equity		$157,800