Question

Cascade Company was started on January 1, Year 1, when it acquired $153,000 cash from the owners. During Year 2, the company earned cash revenues of $93,300 and incurred cash expenses of $69,700. The company also paid cash distributions of $14,000. 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.)

c. Cascade is a corporation. It issued 10,000 shares of $11 par common stock for $153,000 cash to start the business.

Income Stmt

Capital Stmt

Stmt of changes in equity

Balance Sheet

Stmt of cash flows

Answer 1

Cascade Company -->

1.Income Statement
Revenues and Gains
Cash revenues	$93,300
Expenses and Losses
Cash Expenses	$69,700
Net Income	$23600

2.Capital Statement(Statements of changes in equity)
Capital Balance as on january 1,Year 1	$153,000
Add: Investments	-
Add:Net Income	$23600
Less : Cash distribution expenses(owner's withdrawls)	$14,000
Year 1 Capital	$ 1,62,600

3.Balance Sheet of CASCADE COMPANY
ASSETS			LIABILITIES
Current assets			Current liabilities
Cash	$162600		Cash distribution	$-14000
			Stock holder''s equity
			Equity	$110000
			Securities premium	$43000
			Net income	$23600
TOTAL	$162600		TOTAL	$162600

4.Cash Flow Statement
Operating Activity
Cash income	$          93,300
Cash Expense	$ - 69,700
Cash from Operating Activity	$ 23,600
Investing activity	-
Financing Activity
Cash Distributions	$        -14,000
Equity	$      1,10,000
Securities Premium	$          43,000
Cash from Financing Activity	$      1,39,000
cash balance	$ 162,600