Question

Cascade Company was started on January 1, Year 1, when it acquired $160,000 cash from the owners. During Year 1, the company earned cash revenues of $90,400 and incurred cash expenses of $62,500. The company also paid cash distributions of $7,000. 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.)

a. Cascade is a sole proprietorship owned by Carl Cascade.

Complete this question by entering your answers in the tabs below.

• Inc Stmt
• Stmt of Changes
• Bal Sheet
• Cash Flows

Answer 1

Income Statement ($)

Revenues	90,400
Less: Expenses	(62,500)
Net Income	27,900

Balance sheet ($)

Assets:
Cash (from Cash flow statement)	180,900
Total	180,900
Equity	180,900
Total	180,900

Cash flow statements ($)

Cash flows from Operating Activities:
Net Income	27,900
Net Cash flows from Operating Activities		27,900
Cash from Investing Activities		NIL
Cash flows from Financing Activities
Capital Contributed	160,000
Dividends/Drawings	(7,000)
Net Cash flow from Financing Activities		153,000
Net Cash flows during the year		180,900
Begining cash balance		Nil
Ending Cash Balance		180,900